Forensic audit

info@consultconstruction.com
www.consultconstruction.com
Forensic Audit
[A way to detect
Corporate fraud]
Sandesh Mundra & Associates - Prepared by Bhavik Siddhapura
- sandesh.mundra@smaca.in - 9426024975

 A Forensic Audit is a comprehensive and systematic process
involving a series of activities and tasks undertaken for
establishing the accuracy and authenticity of the transactions
under review.
 It may include-
Investigative techniques with an understanding of accounting
principles, review of financial statements to determine if they
are accurate and lawful, Application of accounting methods to
the tracking and collection of forensic evidence.
Meaning of Forensic Audit
Sandesh Mundra & Associates - Prepared by Bhavik
Siddhapura - sandesh.mundra@smaca.in - 9426024975

Forensic
Audit
Propriety
audit
Regularit
y audit
Investigative
audit
Financial
audit
Examination of legalities

Why Forensic Audit Required?
 To find out whether or not true business value has been
reflected in the financial statements
 To find whether any fraud has taken place
 To determine if there are suspicious practices hiding
beneath company or individual financial records and
statements
Sandesh Mundra & Associates - Prepared by Bhavik Siddhapura
- sandesh.mundra@smaca.in - 9426024975

When Forensic Audit Required ?
 Wherever an entity’s finances present a legal concern,
 In cases of suspected fraud,
 To determine tax liability,
 To investigate allegations of bribery,
 To strengthen a company’s already good business practices
 To either determine the lost income as a result of a fraudulent
financial/ operational report,
 To determine the damage that falsified reports caused to
shareholders, clients or employees

Types of frauds detected by Forensic auditors
1.Revenue related frauds
2. Falsified market position
3. Third party related frauds
4. Deceptive sales practices
5. Misrepresentation by Directors.

Constituents of Forensic Audit
1. Assessment of fraud risk factors.
2. Comparison and contrast of various fraud scheme.
3. Developing off-setting internal controls.
4. Using data analysis techniques.
5. Evaluating internal controls.

Constituents of Forensic Audit
6. Evaluating financial and program risk for potential fraud.
7. Applying various evidence-gathering techniques used to detect
fraud.
8. Justifying the auditor’s conclusion of fraud.
9. Documenting the evidence and data-gathering process.
10. Sharing the finding with agency and advise them on how to
avoid the fraud in the future

Distinction Between Financial Audit and Forensic audit
Financial Audit Forensic Audit
Examination of the financial
statements in accordance with the
applicable standards and norms.
Identifying and analyzing the
possibility of fraudulent financial
reporting and misappropriation of
assets.
 Audit opinion is on the whole set
of financial statements being
audited
The main concern is on raising of the
awareness of the specific
irregularities reported
 Audit is the nature of public
interest.
 Audit is conducted considering the
interest of specific person who
have hired them.
Sandesh Mundra & Associates - Prepared by Bhavik Siddhapura - sandesh.mundra@smaca.in - 9426024975

Distinction Between Financial Audit and Forensic audit
Financial Audit Forensic Audit
 Auditors are concerned with errors
and irregularities.
Forensic accountants are concerned
with distinction between errors of
judgement and deliberate
misrepresentations.
 Working without indemnification  Work usually has both
indemnification and hold correct
protections
 Auditor determines the nature ,
scope and extent of the audit.
Client determines the nature ,
scope and extent of the audit.
Sandesh Mundra & Associates - Prepared by Bhavik Siddhapura - sandesh.mundra@smaca.in - 9426024975

How are frauds detected in the Forensic Audit ?
 The forensic auditor specifically look for the financial misconduct
taken place in the financial records and statements of the entity.
 AS against the regular review or audit of financial statements , it
focuses on the gathering of the evidence to be produced in court
of law the proceedings taking place.
 Various detecting techniques used by Forensic auditors may
include the investigation, pro-active detection, identifying the
absence of morals rules in organization, weaknesses in the line of
defense such as ineffective internal control /audit.

Conclusion of forensic Audit
Forensic Auditing not only identifies the factors or reasons
adversely affecting the trust in mechanism of trade, finance and
investment, but also helps in recognizing the destabilizing effect on
commercial institutions and corporate houses directly affecting the
national progress and putting strain on national resources.

THANK
Y U

Forensic audit

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Destaque

Destaque (18)

Semelhante a Forensic audit

Semelhante a Forensic audit (20)

Mais de sandesh mundra

Mais de sandesh mundra (20)

Último

Último (20)

Forensic audit