How it differs from a statutory audit
| Point | Statutory audit | Forensic audit |
|---|---|---|
| Purpose | Opinion on whether financial statements are true and fair | Establish facts about a specific concern |
| Scope | Whole financial statements, on a sample basis | Targeted transactions, people and periods |
| Output | Audit opinion | Findings with evidence |
Common areas we investigate
- Payments to fictitious or related vendors.
- Expense and reimbursement fraud.
- Diversion of funds by promoters or employees.
- Inventory losses and pilferage.
- Revenue manipulation.
- Financial disputes between partners or shareholders.
How we handle it
Define the scope
The concern, the period and what the engaging party needs.
Secure data
Books, bank records, emails and documents preserved before analysis.
Analyse
Transaction testing, data analytics and document review.
Interview
Where appropriate and agreed.
Report
Findings with supporting evidence and methodology.
When to commission a forensic audit
- Margins falling without a business reason, or costs rising faster than activity.
- Vendors nobody can quite identify, or payments to vendors sharing addresses or bank accounts with employees.
- Cash or stock that doesn't reconcile, repeatedly.
- Books kept by one person who resists leave, audit or questions.
- A whistle-blower complaint, a lender's concern, or a dispute between partners or shareholders.
What the report contains
- The scope and the questions the engagement set out to answer.
- Sources of evidence and how they were obtained and preserved.
- Procedures performed, including data analytics and document review.
- Findings, each linked to the evidence behind it.
- Limitations, and matters that need further inquiry or legal advice.
- Books of account and bank statements for the period under review.
- Vendor, customer and employee master data.
- Approval records, emails and policies relevant to the concern.
- Any complaint, audit observation or lender letter that triggered the review.
Practical notes from our engagements
- Evidence altered before the review. Preserve records the moment a concern arises.
- Scope too broad. A focused scope produces clearer findings faster.
How we handle forensic audits
We agree a focused scope, preserve evidence first, and report findings with the evidence behind them.
Related services
Frequently asked questions
What is a forensic audit?
An investigation of a specific suspected irregularity to establish what happened, with evidence.
Who commissions a forensic audit?
Boards, promoters, investors, lenders and parties to a dispute.
How long does it take?
It depends on the scope and records; a focused scope can often be completed in weeks.
Is the report confidential?
Yes. It's shared only with the engaging party.
Can the findings be used in legal proceedings?
The report is prepared with evidence and methodology so it can support further action; legal proceedings themselves are handled by the client's advocates.
Is a forensic audit the same as an internal audit?
No. An internal audit reviews processes and controls on a continuing basis; a forensic audit investigates a specific concern to establish facts.
Can a forensic audit be done without the employee knowing?
The approach depends on the concern and the engaging party's instructions. Preserving evidence discreetly is usually the first step.