Before it consumes your company.
A forensic audit is the inspection and analysis of a company’s or individual’s financial records in order to acquire evidence for use in a legal case or lawsuit or to demonstrate issues such as asset theft, fraud, and deception.
To determine whether there are any suspect practices lying behind a company’s or an individual’s financial records and statements, forensic auditing combines investigative tactics with an understanding of accounting principles.
What is the purpose of a forensic audit?
The following are some of the most common reasons for forensic audit investigations:
*Conflicts of interest* – It occurs when a fraudster exploits his or her influence for personal benefit at the expense of the company.
*Bribery* – As the term implies, bribery is the act of offering money to get things done or influence a situation in one’s favor.
2. Misappropriation of Asset
This is the most common and widespread type of fraud. Misappropriation of funds, creation of fictitious invoices, payments given to non-existent suppliers or workers, misappropriation of assets, or theft of inventory are a few examples of such asset misappropriation.
3. Financial statement fraud
Financial statement fraud can appear in a variety of ways, including intentional falsification of accounting records, omission of transactions – either revenue or expenses, omission of key facts from financial statements, or failure to apply the proper financial reporting standards.
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