What is the difference between a CDFA® and a forensic accountant?

What a CDFA® does

A Certified Divorce Financial Analyst (CDFA®) is a professional who has completed training and certification in the financial issues specific to divorce. Their work includes:

• Income analysis - determining true income for support, especially for self-employed spouses
• Settlement analysis - comparing proposals on an after-tax basis, modeling long-term outcomes
• After-tax valuations - comparing assets by their true after-tax value, not face value
• Retirement division - identifying which instrument is needed (QDRO, COAP, transfer), calculating marital shares, recommending valuation dates
• Support calculations - analyzing income, standard of living, and cash flow for alimony and child support
• Tax analysis - understanding the tax consequences of asset division, alimony, and property transfers
• Mediation support - helping clients evaluate proposals in real time during mediation

The CDFA®'s role is strategic - they help the attorney and client understand the financial picture and make informed decisions.

What a forensic accountant does

A forensic accountant (or forensic financial analyst) focuses on investigating financial records to find the truth. Their work includes:

• Separate property tracing - following premarital, inherited, or gifted funds through accounts
• Hidden income investigation - finding unreported revenue, off-the-books accounts, or manipulated financials
• Lifestyle analysis - reconstructing historical spending from bank and credit card records
• Financial irregularities - identifying patterns that suggest fraud, concealment, or manipulation
• Record reconstruction - piecing together account histories from incomplete or missing records
• Expert testimony - presenting findings in deposition and at trial

The forensic accountant's role is investigative - they dig into the records to find what's really there.

Where they overlap

Both CDFA®s and forensic accountants may:

• Analyze income - though the CDFA® focuses on what's available for support, while the forensic accountant focuses on what's hidden
• Review business records - the CDFA® for income and valuation, the forensic accountant for tracing and investigation
• Testify as experts - both can provide expert reports and testimony
• Work with attorneys - both support the attorney's case with financial analysis

When to use each

Use a CDFA® when:

• You need to compare settlement proposals
• You need income analysis for support
• You need after-tax valuations of assets
• You need retirement division analysis
• You need help evaluating proposals in mediation
• You need the overall financial strategy for the case

Use a forensic accountant when:

• You need to trace separate property through commingled accounts
• You suspect hidden income or undisclosed assets
• You need a lifestyle analysis from historical records
• You need to reconstruct account histories from missing records
• You need to identify financial irregularities or fraud

Use both when:

• The case involves both settlement analysis and tracing
• The case involves a self-employed spouse with potential hidden income AND support issues
• The case involves a business that needs both valuation and income investigation

What about a business valuation professional?

A business valuation professional (CVA, ASA, ABV) is a separate specialty focused on determining the fair market value of a business. They use accepted valuation approaches (income, market, asset), normalize financials, allocate goodwill, and provide a defensible valuation report. A CDFA® may work alongside a valuation professional - the CDFA® handles the overall case strategy, while the valuation professional handles the business valuation.

Credentials to look for

CDFA®

• Certified Divorce Financial Analyst - trained and certified in divorce financial analysis

Forensic credentials

• MAFF (Master Analyst in Financial Forensics) - advanced forensic certification
• CFF (Certified in Financial Forensics) - AICPA forensic credential
• FA (Forensic Accountant) - forensic accounting certification

Valuation credentials

• CVA (Certified Valuation Analyst) - business valuation certification
• ASA (Accredited Senior Appraiser) - business valuation credential
• ABV (Accredited in Business Valuation) - AICPA valuation credential

Tax credentials

• EA (Enrolled Agent) - federally licensed tax professional, can represent before the IRS
• CPA (Certified Public Accountant) - accounting and tax credential

Davis Schuler & Associates has professionals who hold multiple credentials:

• Joseph A. Davis, EA, MAFF, CDFA®, BFA™ - tax, forensic, divorce financial analysis
• Aaron Schuler, Jr., EA, CVA, CDFA® - tax, business valuation, divorce financial analysis

Factors that typically matter

• Type of financial issue - settlement analysis (CDFA®) vs. investigation (forensic) vs. valuation (CVA)
• Self-employment - income analysis (CDFA®) or hidden income investigation (forensic)
• Separate property claims - tracing (forensic)
• Business ownership - valuation (CVA) and income analysis (CDFA®)
• Complex retirement assets - division analysis (CDFA®)
• Need for expert testimony - both can testify
• Credentials - CDFA®, MAFF, CVA, EA, CPA - look for the right combination

Documents commonly reviewed

• Tax returns - 3–5 years, personal and business
• Bank and credit card statements - for income and spending analysis
• Business financial statements - for income and valuation
• General ledger - for personal expenses and tracing
• Brokerage and retirement statements - for asset valuation and tracing
• Divorce decree and settlement proposals - for settlement analysis
• Discovery responses - for identifying what's missing

Common mistakes and misconceptions

• Using a CDFA® when you need a forensic accountant - if the issue is hidden income or tracing, a CDFA® alone may not have the investigative training
• Using a forensic accountant when you need a CDFA® - if the issue is settlement comparison and after-tax analysis, a forensic accountant may not have the divorce-specific training
• Not using any expert - assuming the attorney can handle all financial analysis
• Not matching credentials to the issue - a CDFA® for a complex business valuation, or a CVA for lifestyle analysis
• Waiting too long - the earlier the right expert is engaged, the more value they provide

When a professional may be useful

Davis Schuler & Associates has professionals with multiple credentials to serve in multiple roles:

• Joseph A. Davis, EA, MAFF, CDFA®, BFA™ - divorce financial analysis, forensic financial analysis, tax analysis
• Aaron Schuler, Jr., EA, CVA, CDFA® - divorce financial analysis, business valuation, tax analysis

We can serve as your CDFA®, forensic financial analyst, valuation professional, or tax professional - or coordinate multiple roles depending on the needs of your case. Contact us to discuss which combination of services is right for your matter.