Forensic Audit Services involves a detailed evaluation of records and documents to obtain and extract evidence against the Crime or Fraud that can be used in a court of law or legal proceeding. Going by the general definition of the term Forensic means application of scientific methods and techniques in the investigation process. Forensic Auditing is very different from Forensic accounting.
Forensic accounting is like Fraud investigation where the fraud is committed by employees, vendors, customers which are against the Business. Whereas Forensic Audit is required when there is fraud or crime for the Business. This may involve Shareholders, Owners, Management, Partners themselves indulging in Frauds.
Forensic Audit Services are generally on Financial frauds. It requires the utmost expertise and knowledge in the field of accounting & auditing. Forensic Audits are ordered by external parties to gather the evidence. For e.g. Banks may order Forensic Audit on Non- Performing Assets, or for accounts where funds are not utilized by Borrower for the purpose for which they were borrowed, and so on.
Who initiates a Forensic Audit?
Emirates Chartered Accountants Group - Professionals in Forensic and Investigative Audit Services in Dubai, UAE.
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Pradeep Sai | Partner
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Generally, it is ordered by Stakeholders, Banks, Regulatory Authority, Financial Institutions, Court. Forensic Audit is to confirm and evaluate the fraud with concrete evidence and documents.
The steps or process involved while conducting a Forensic Audit will be similar to that of normal Financial Audit with one additional and important step of representation or appearance in the Court of Law or Legal Proceeding. The evidence gathered would need to be presented in the Court of Law. Largely the steps in Forensic Auditing will include:
Planning the Audit Investigation
Presentation in Court of Law
Forensic Audit is more than normal Audit. It involves investigations which may expose or confirm illegal activities with concrete evidence. The normal Audit might serve the purpose of its presentation in court but the Forensic Audit Report is used in the Court of Law or legal proceeding.
Frauds or crime may involve the following:
Forensic Audit is a very specialized type of audit which requires skilled members with expert knowledge on the subject. We at Emirates Chartered Accountants Group, have a qualified team to undertake the Forensic Audits.
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People usually ask
Yes, Forensic Audit is different from Financial Audit. In the case of Forensic Auditing, the evidence is to be presented in the Court of Law.
Forensic Auditor has to appear in court to present the evidence and provide an explanation on how the suspects were identified.
Yes, gathering concrete evidence is very important in Forensic Auditing.
Yes, Forensic Auditing requires a special technique and methods to be followed.