Forensic audit services are a specialized type of auditing that involves examining and evaluating financial records and documents to obtain and present evidence of fraud, corruption, or other illegal activities. Forensic audit services are often required by stakeholders, banks, regulatory authorities, courts, or other parties who need to investigate, resolve, or prevent financial disputes or crimes.
A forensic audit is a type of audit that examines and evaluates the financial records of a person or a company to find evidence that can be used in a legal proceeding. A forensic audit is important because it can help to detect and prevent fraud, corruption, embezzlement, and other financial crimes. A forensic audit can also help to resolve disputes, recover losses, and enforce contracts. A forensic auditor is a professional who has the skills and knowledge of accounting, auditing, law, and investigation. A forensic audit can be used to:
A forensic audit is important for several reasons, such as:
Being one of the leaders in fraud prevention and examination services, Farhat & Co. can help you build a Fraud Prevention System. Professional certified fraud examiners and a reputation for quality service can certainly provide you with an assurance that we are skilled in this field and a lot more.
We are an expert in forensic audit and a regulated expert by Dubai Courts, Dubai Prosecution, Abu Dhabi Courts and Prosecution, and Sharjah Courts and Prosecution. We also make certain that you are aware of the damages of the fraud and evaluate exactly how much. And even willing to conduct a business valuation with your request.
To pinpoint the existing fraud that is currently going on in your business, we can trace where your money is going, which can even help in preventing future fraudulent acts that could happen when actions are not taken immediately. Our services are not just limited to the above since we ensure that every document for certain events that are taken into account about the movement of money during the alleged crime is checked and assessed to ensure where the money came from, went, and its current place.
We also make certain that you are aware of the damages of the fraud and evaluate exactly how much. And even willing to conduct a business valuation with your request. By letting us work with you and availing our services, we ensure that your organization’s internal controls that can identify potential weak spots where fraudulent acts can enter are efficient enough. We also see to it that fraud won’t transpire in your organization in the first place.
| Forensic Audit | Regular Audit |
|---|---|
| A detailed and specific investigation of financial records and documents to collect and analyze evidence of fraud, corruption, or other illegal activities. | A systematic and independent examination of financial statements, records, or transactions to provide an opinion on their accuracy, completeness, and compliance with accounting standards and regulations. |
| Usually performed by a forensic auditor who has specialized skills and knowledge in accounting, auditing, law, investigation, and technology. | Usually performed by an external auditor who follows the auditing standards and procedures established by the relevant professional bodies or authorities. |
| Often initiated by a third party who suspects or has evidence of financial misconduct or crime. May also be ordered by a court or a regulatory authority as part of a legal proceeding or an enforcement action. | Usually requested by the management or the shareholders of the entity being audited. May also be required by law or by the regulators for certain types of entities or transactions. |
| Aims to provide evidence on the nature, extent, and impact of financial fraud or crime. | Aims to assure the overall reliability and fairness of the financial statements or transactions. |
| Focuses on specific areas or issues that are relevant to the investigation or the dispute. | Covers a broad range of financial activities and transactions. |
| Does not have a materiality threshold and investigates every transaction or record that is relevant to the case. | Has a materiality threshold and may not detect or report fraud that is below a certain level of significance. |
| Follows the Generally Accepted Forensic Accounting Principles (GAFAP). | Follows the Generally Accepted Auditing Standards (GAAS). |
| A non-recurring, reactive, and unforeseen event. | A planned event that occurs on an annual basis. |
The steps involved in a forensic audit in Dubai are similar to those in other jurisdictions, with some variations depending on the nature and scope of the audit, the applicable laws and standards, and the specific objectives and best practices followed by the forensic auditor. Generally, the steps are as follows:
1. Planning the Investigation:
In this step, the forensic auditor defines the objectives, scope, and methodology of the audit, identifies the key risks and issues, and develops a work plan and budget. The forensic auditor also obtains the necessary documents, data, and information from the client and other sources, and establishes the communication and reporting protocols with the client and other relevant parties.
2. Collecting Evidence:
In this step, the forensic auditor performs various procedures to gather and analyze the evidence, such as interviews, observations, inspections, reconciliations, calculations, tests, and sampling. The forensic auditor also uses various tools and techniques, such as computer-assisted audit techniques (CAATs), data analytics, digital forensics, and fraud detection software, to identify anomalies, discrepancies, and red flags in financial records and transactions. The forensic auditor documents the evidence and maintains a chain of custody to ensure its reliability and admissibility in court.
3. Reporting:
In this step, the forensic auditor prepares a written report to present the findings, conclusions, and recommendations of the audit. The report should be clear, concise, and objective, and should include the following elements: an executive summary, an introduction, a background, a scope and methodology, a detailed analysis of the evidence, a discussion of the issues and implications, and a conclusion and recommendation. The report should also include supporting documents, such as working papers, exhibits, charts, graphs, and tables, as well as the references and sources of the information used in the audit.
4. Court Proceedings:
In this step, the forensic auditor may be required to testify as an expert witness in court or arbitration or to assist the client or their legal counsel in the preparation and presentation of the case. The forensic auditor should be prepared to explain and defend the audit report, the evidence, and the methodology, and to answer any questions or challenges from the judge, jury, or opposing party. The forensic auditor should also be aware of the legal and ethical standards and obligations that apply to their role and conduct in court proceedings.
Forensic audit services can provide various benefits to the clients, such as:
Detecting and preventing fraud and crime: Forensic audit services can help clients identify and expose the fraud and crime that may have occurred or may be occurring in their financial activities
or transactions, and to take appropriate actions to stop or prevent further losses or damages.
Resolving and recovering from disputes and crises: Forensic audit services can help clients resolve and recover from the disputes and crises that may have arisen or may arise due to fraud
and crime, and to restore their reputation, trust, and confidence among their stakeholders, customers, and regulators.
Improving and strengthening controls and systems: Forensic audit services can help clients improve and strengthen their internal controls and systems that are designed to prevent or detect fraud and crime, and to enhance their governance, risk management, and compliance functions.
Farahat & Co. is a leading audit firm in Dubai, UAE that offers forensic audit services to clients who need to investigate and prevent fraud, corruption, and other financial crimes. Farahat & Co. has a team of certified fraud examiners and forensic accountants who have the expertise and experience to conduct forensic audits in various fields and industries.
Farahat & Co. can help you with forensic audit services by:
Farahat & Co. is a trusted and reputable audit firm in Dubai, UAE, which has been providing forensic audit services for more than 30 years. Farahat & Co. can help you with forensic audit services in Duba. You can contact Farahat & Co. for an initial consultation.
Disclaimer: The information provided in the article is for general guidance and reference purposes only. It is not intended to be a substitute for professional advice, consultation, or service. The reader of this article should consult with a qualified forensic auditor or a reputable forensic audit firm in the UAE before initiating or conducting a forensic audit.