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Forensic Audit

Forensic Audit2021-03-20T18:38:41+08:00

A forensic audit is an examination and evaluation of a firm’s or individual’s financial information for use as evidence in court. A forensic audit can be conducted in order to prosecute a party for fraud, embezzlement or other financial claims. In addition, an audit may be conducted to determine negligence or even to determine how much spousal or child support an individual will have to pay.

FORENSIC AUDIT

Forensic auditing is a specialisation within the field of accounting, and forensic auditors often provide expert testimony during trial proceedings. The audit covers a wide range of investigative activities performed by accountants. The process may also include serving as an expert witness in a fraud trial. A forensic audit could also cover situations that do not involve fraud or embezzlement, such as disputes related to a bankruptcy, business closures, and divorces.

The Process

The investigation process follows a similar path as a regular audit of financial statements. The steps can include planning, review and a report. If the investigation was undertaken to discover the presence of fraud, evidence is presented to uncover or disprove the fraud and determine the amount of the damages suffered. The findings are presented to the client — and possibly the court should the case go that far.

During the planning stage, the forensic auditing team establishes objectives, such as identifying if fraud has been committed, how long it has been going on, the parties involved, quantifying the financial loss and providing fraud prevention measures. While gathering evidence, the team collects evidence in the proper manner in order for it to be used in a court case. There are various techniques used to gather evidence. A report is produced for the client with the findings. Lastly, those involved in the forensic audit may be asked to present their findings to the court.

1. Acquisition and Debtors

The investigation process follows a similar path as a regular audit of financial statements. The steps can include planning, review and a report. If the investigation was undertaken to discover the presence of fraud, evidence is presented to uncover or disprove the fraud and determine the amount of the damages suffered. The findings are presented to the client — and possibly the court should the case go that far.

During the planning stage, the forensic auditing team establishes objectives, such as identifying if fraud has been committed, how long it has been going on, the parties involved, quantifying the financial loss and providing fraud prevention measures. While gathering evidence, the team collects evidence in the proper manner in order for it to be used in a court case. There are various techniques used to gather evidence. A report is produced for the client with the findings. Lastly, those involved in the forensic audit may be asked to present their findings to the court.

2. Fraud Detection

One of the main functions of forensic accountants is financial statement misrepresentations engagements, especially during litigation and fraud investigations. Instead of organizations waiting for yearly audits by external auditors to assess financial records, it can help to have an internal and permanent forensic accountant. Regular external audits expose a business’s secrets, which could affect its performance, as it is carves out its market share. On the contrary, regular internal forensic audits can identify lapses early enough and provide remedies without exposing the business to its clients and public. An accounting with forensic accounting skills can catch fraud cases early through financial records screening and tracking of computer systems.

3. Strong Internal Controls

One of the main functions of forensic accountants is financial statement misrepresentations engagements, especially during litigation and fraud investigations. Instead of organizations waiting for yearly audits by external auditors to assess financial records, it can help to have an internal and permanent forensic accountant. Regular external audits expose a business’s secrets, which could affect its performance, as it is carves out its market share. On the contrary, regular internal forensic audits can identify lapses early enough and provide remedies without exposing the business to its clients and public. An accounting with forensic accounting skills can catch fraud cases early through financial records screening and tracking of computer systems.

Types of Fraud

Forensic audits uncover several types of fraud. The most common involves theft, including cash, inventory and fraudulent payments. Another type of fraud is corruption, such as a conflict of interest, bribery and extortion. The last major category is financial statement fraud. This relates to misstatements of the financials of a company.

  • Valuation
  • Missing Items
  • Over Charging
  • The Real Story
  • Misappropriation
  • Something is Off
  • Shareholders
  • Damages to Property
  • Royalties
  • Malpractice
  • Collusion
  • Business Partners
  • Inheritance
  • Financial Situation

  • Tax Audit

  • Dividing Assets
  • Incorrect Beliefs
  • Legal
  • Employees
  • Natural Disaster
  • Partners Cheating

Types of Fraud

Forensic audits uncover several types of fraud. The most common involves theft, including cash, inventory and fraudulent payments. Another type of fraud is corruption, such as a conflict of interest, bribery and extortion. The last major category is financial statement fraud. This relates to misstatements of the financials of a company.

  • Valuation
  • Missing Items
  • Over Charging
  • The Real Story
  • Misappropriation
  • Something is Off
  • Shareholders
  • Damages to Property
  • Royalties
  • Malpractice
  • Collusion
  • Business Partners

  • Inheritance

  • Financial Situation

  • Tax Audit

  • Dividing Assets

  • Incorrect Beliefs

  • Legal

  • Employees

  • Natural Disaster

  • Partners Cheating

OUR AREAS

Local Statutory Audit
Internal Audit
Other Attestation Services

Key Contacts

Head Partner & EQCR, Audit and Assurance
contact email
Head Partner & EQCR, Audit and Assurance
contact email

Barry Jay Epstein

Head of Forensic Services
contact email

Barry Jay Epstein

Head of Forensic Services
contact email

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