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Forensic audits

Definitions

Forensic accounting uses accounting, auditing, and investigative skills
to conduct an examination into a company’s financial affairs.

The aim is to provide accounting analysis that is potentially suitable for
use in court.

It is an umbrella term encompassing both forensic investigations and
forensic audits.

Forensic investigation refers to the practical steps that the forensic
accountant takes in order to gather evidence that could be used in legal
proceedings.

Such investigations involve planning, gathering evidence, quality control
reviews and production of a report.

Forensic audit refers to the specific procedures within a forensic
investigation in order to obtain evidence, usually to quantify a financial
loss.

This could include the use of traditional financial auditing techniques
such as analytical procedures and substantive procedures for example
to quantify the extent of a fraud or to determine the amount of an
insurance claim.

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