Forensic Audit
Candlefocus EditorThe primary purpose of a forensic audit is to discover fraud and other kinds of irregularities. This is done through reviewing and analyzing financial documents, communications such as emails, and supporting documents such as contracts, invoices, and bank statements. A forensic audit can include many steps including interviewing key personnel; analyzing documents and financial data; analyzing accounting records such as double-entry bookkeeping; reconciling accounts; investigating potential conflicts of interest; and making recommendations to improve internal controls.
Forensic auditors must be meticulous in their reviews. Forensic audits are often used to investigate business-related disputes, locate missing funds, and detect fraud and corruption. They must not just uncover evidence of wrongdoing, but also be able to present it in a clear, informative manner in a court of law, if necessary. They must also assess and report on the efficiency and effectiveness of operations and procedures that operation in specific areas of an organization.
Overall, forensic audit is a specialized branch of accounting focused on investigating potential or actual financial misconduct or criminial activity. It requires an experienced and knowledgeable auditor who can investigate and uncover evidence that can be presented in a court of law. It is often used to investigate business disputes, locate missing funds, and detect fraud and corruption.