Forensic Auditing

Forensic Auditing

Forensic Auditing

A forensic audit examines and evaluates the financial records of a business or an individual to derive evidence used in court or legal proceedings.

 

Forensic audits need accounting and auditing procedures and professional knowledge regarding the legal framework of such an audit.

 

Forensic auditing includes a wide range of investigative activities. They are often conducted to implead a party for fraud, embezzlement or other financial crimes. In the process of a forensic audit, the auditor may be asked to become an expert witness during investigative actions. Forensic audits can also involve situations that do not involve financial fraud, such as disputes over bankruptcy filings and business closings.

 

Forensic investigations can reveal or confirm various types of illegal activity. Usually, if the collected evidence is to be used in court, a forensic examination is preferred over a routine audit.

Steps involved in a forensic audit –

Step 01
Planning the investigation

  • Determining the type of fraud that has been carried out.
  • Determine the amount that has been defrauded or misappropriated.
  • Ascertain the period in which the fraud has occurred.
  • Collection of evidence to prove the fraud.
  • Suggestion on preventative measures to be adopted in order to curb such frauds in the future.

Step 02
Gathering Evidence

The evidence collected must be sufficient to support the identity of the party that has committed fraud, in the court & reveal the details of the fraud scheme and document the financial loss and parties affected by the fraud.

Step 03
Reporting

For a forensic audit, a written report of the fraud must be provided to the client in order for them to take legal action if desired.

Scenarios where Forensic Auditing is required

01

For legal remedy

Those people who are looking to seek legal action for their losses in respect of fraud.

02

Asset misappropriation

The most common type of fraud is the misappropriation of assets. A few examples are stealing company inventory, forging bills, paying suppliers or employees who aren't there, misusing assets (such as company equipment), and misappropriating cash.

03

Fraudulent financial statements

A company may engage in this type of fraud to make its finances look better than they really are. The purpose of window dressing numbers is to improve cash flow, ensure top level executives continue to receive bonuses, or overcome performance pressures.

How can we at Oxford Auditing help with Forensic Auditing?

Forensic auditing requires professional expertise & at Oxford Auditing we’ve got sufficiently qualified Certified Fraud Examiners & a team of Chartered Accountants working in conjunction to help clients with their needs. Moreover we have conducted various assignments of forensic auditing that gives us sufficient confidence to facilitate such engagements for our clients.

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