Investigating & Forensic Audit

When markets constrict and when growth slows and revenues come under pressure, the risks of corporate fraud and misconduct escalate. Across the workforce, the fear of losing jobs and bonuses can silently undermine corporate cultures – even those recognised for upholding a high standard of ethics, behaviors and values.  And when some of the consequences of cutting costs take effect and fewer resources dedicated to the internal audit and compliance function – risks rise.

Are the companies prepared to respond when the risk occurs? Do you think you are as protected as you are? Well..

Even though the risk managers, compliance officers, internal auditors and general counsels would often consider the organization as protected and sound. However that's something to reconsider. An increased awareness of the fraud and corporate risks, many companies have started implementing strategies and controls to prevent and detect fraudulent financial reporting, misappropriation of assets and criminal conduct in compliance with a rich tapestry of requirements. Corporate entities and government agencies are increasingly turning to forensic accounting experts for assistance with preventive measures, designed to keep fraud and the associated expense of the investigation (and litigation) process to a minimum. Forensic accountants may be asked to conduct thorough internal audits, through which potential pitfalls are uncovered. After identifying problem areas, forensic accountants can help corporate and nonprofit clients take the necessary next steps to minimize the potential for fraud. In the corporate environment, forensic accountants can also monitor for compliance with emerging regulations.


Why is a forensic audit conducted?
Forensic audit investigations are made for several reasons, including the following:


Corruption
In a forensic audit, while investigating fraud, an auditor would look out for:

1- Conflicts of interest
When a fraudster uses his/her influence for personal gains detrimental to the company. For example, if a manager allows and approves inaccurate expenses of an employee with whom he has personal relations. Even though the manager did not directly financially benefit from this approval, he is deemed likely to receive personal benefits after making such inappropriate approvals.
2- Bribery
As the name suggests, offering money to get things done or influence a situation in one’s favor is bribery. For example, Telemith bribed an employee of Technosmith company to provide certain data to aid Telesmith in preparing a tender offer to Technosmith.
3- Extortion
If Technosmith demands money in order to award a contract to Telemith, then that would amount to extortion.


Asset misappropriation
Asset misappropriation is the most common and prevalent form of fraud. Misappropriation of cash, creating fake invoices, payments made to non-existing suppliers or employees, misuse of assets, or theft of Inventory are a few examples of such asset misappropriation.


Financial statement fraud
Companies get into this type of fraud to try to show the company’s financial performance as better than what it actually is. The goal of presenting fraudulent numbers may be to improve liquidity, ensure top management continue receiving bonuses, or to deal with pressure for market performance.

Some examples of the form that financial statement fraud takes are the intentional forgery of accounting records, omitting transactions – either revenue or expenses, non-disclosure of relevant details from the financial statements, or not applying the requisite financial reporting standards.

To summarize, a forensic audit is a detailed engagement that requires the expertise of not only accounting and auditing procedures but also expert knowledge regarding the legal framework. A forensic auditor is required to have an understanding of various frauds that can be carried out and of how evidence needs to be collected. Which is why we are here for you. We bring technical expertise and experience to each fraud engagement and work efficiently to address and preserve our client's financial and professional integrity.

Our audit team possesses a wide array of professional credentials and drawing from our extensive years of audit and fraud investigation experience, we are able to identify critical issues of greatest concern. The result is an investigation that is not only thorough and complete, but also efficient and timely, which are critical success factors in today's environment. Our team is ready to assist clients in the prevention, detection, investigation and remediation of fraud, and financial crime.

Our services include: