Page 350 - CA Final PARAM Digital Book.

Depending on the nature of the case, this may involve locating documents, economic
information, assets, a person or company, another expert or proof of the occurrence of
an event.

• Depends on Nature of Fraud
In order to gather detailed evidence, the investigator must understand the specific type
of fraud that has been carried out, and how the fraud has been committed.

• Sufficient to Prove Identity of Fraudster / Mechanics of Fraud / Amount of
Fraud / Clear Chain of Custody / Usable in Court
The evidence should be sufficient to ultimately prove the identity of the fraudster(s),
the mechanics of the fraud scheme, and the amount of financial loss suffered. It is
important that the investigating team is skilled in collecting evidence that can be used in
a court case, and in keeping a clear chain of custody until the evidence is presented in
court. If any evidence is inconclusive or there are gaps in the chain of custody, then the
evidence may be challenged in court, or even become inadmissible. Investigators must
be alert to documents being falsified, damaged or destroyed by the suspect(s).

Step 4.- Perform the analysis
The actual analysis performed will be dependent upon the nature of the assignment and
may involve:
• summarizing a large number of transactions
• calculating economic damages;
• performing present value calculations utilizing appropriate discount rates;
• performing a regression or sensitivity analysis;
• utilizing a computerized application such as a spread sheet, data base or computer
model;
• utilizing charts and graphics to explain the analysis.
• performing a tracing of assets;

Step 5.- Reporting
Issuing an audit report is the final step of a fraud audit. Auditors will include information
detailing the fraudulent activity, if any has been found. The client will expect a report
containing the findings of the investigation, including a summary of evidence and a
conclusion as to the amount of loss suffered as a result of the fraud.

• Sections in Report
The report may include sections on the nature of the assignment, scope of the
investigation, approach utilized, limitations of scope and findings and/or opinions. The
report will include schedules and graphics necessary to properly support and explain
the findings.

The report will also discuss how the fraudster set up the fraud scheme, and which
controls, if any, were circumvented. It is also likely that the investigative team will
recommend improvements to controls within the organization to prevent any similar
frauds occurring in the future.

• Facts should be the base and not mere Opinions
The forensic auditor should have active listening skills which will enable him to
summarize the facts in the report. It should be kept in mind that the report should be
based on the facts assimilated during the process and not on the opinion of the person
writing the report.

Step 6. Court proceedings
The investigation is likely to lead to legal proceedings against the suspect, and members of
the investigative team will probably be involved in any resultant court case. The evidence
gathered during the investigation will need to be presented at court, and team members
may be called to court to describe the evidence they have gathered and to explain how the
suspect was identified.

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