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Forensic audit is unlike other audits Explain
Answer Difference between a forensic audit and financial audit:
Sr. Particulars Financial Audit Forensic Audit

No.
1 Objectives Express an opinion as to Whether fraud has taken
‘True & Fair’ presentation place in books
2 Techniques Substantive & Compliance. Investigative, substantive
Sample based or in-depth checking

3 Period Normally for a particular No such limitations
accounting period.
4 Verification of Relies on the management Independent/verification of
stock, Estimation certificate/Management suspected/selected items
realisable value Representation where misappropriation in
of assets, suspected
provisions,
liability etc.
5 Off balance sheet Used to vouch the Regulatory & propriety of
items (like arithmetic accuracy & these
contracts etc.) compliance with transactions/contracts are
procedures examined.
6 Adverse findings Negative opinion or Legal determination of
if any qualified opinion expressed fraud impact and
with/without quantification identification of
perpetrators depending on
scope.

QNO “Forensic” meaning and its need Old Course-- (SM21)
629.500 TITANIUM CNO – FA.040
What do you understand by the word “Forensic” and why the need for forensic audit arises?

➢ “Forensic” means “suitable for use in the court of law”.
➢ Bologna said that it is the application of financial skills and investigative mentality to unresolved
issues, conducted within the context of the rules of evidence.
➢ As an emerging discipline, it encompasses financial expertise, fraud knowledge and a sound
knowledge and understanding of business reality and the working of legal system.

➢ Need for forensic audit (A Forensic Auditor is often involved in

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