An audit that looks for fraud or other financial irregularities is called forensic audit. Forensic auditors draw on their expertise in accounting, auditing, and law to gather information and identify the root of the problem.

Forensic audits are frequently conducted in reactions to alleged fraud or embezzlement incidents. However, they can also be used as a precaution to foresee issues. Depending on the situation, the scope of an audit may change. However, this usually involves the following steps.

  • Planning an audit entails determining the audit's goals, creating an audit strategy, and obtaining management approval for the plan.
  • Gathering documentation, interviewing witnesses, and carrying out procedures are all parts of the evidence collection process.
  • Examining evidence to determine the root cause of the issue is known as evidence analysis.
  • Presenting findings: This entails informing the board and management of the audit's findings.
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