Page 344 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Client Meeting: Arrange a meeting with the client to understand the key facts, involved parties, and issues at
hand.
Conflict Check: Conduct a conflict check once the relevant parties are identified to avoid potential issues later
on.
Preliminary Investigation: Undertake a preliminary investigation to grasp the issues better before developing
a detailed action plan.
Step 2. Develop Plan
Planning: Creating a plan that incorporates insights from the client meeting and initial investigation.
Outlining the goals to be achieved through the assignment.
Methodology: Determining the methodology to be used to achieve the set objectives.
Step 3. Obtain Relevant Evidence
Evidence Gathering: Depending on the case, it may involve locating various elements such as documents,
economic information, assets, individuals, companies, experts, or proof of an event. Understanding the specific
type of fraud committed and its mechanics to gather detailed evidence.
Sufficient Evidence: Ensuring the evidence collected is sufficient to prove the identity of the fraudster(s), the
fraud scheme, and the financial loss incurred.
Court-admissible: The investigating team must be skilled in collecting court-admissible evidence within the
stipulated time frame while maintaining a clear chain of custody. Ensuring no gaps in the chain of custody to
prevent evidence from being challenged or deemed inadmissible in court.
Alertness: Maintaining vigilance against potential falsification, damage, or destruction of documents by
suspects.
Step 4. Perform the analysis
1. Data Summarization & Tracing:
• Summarizing a large number of transactions.
• Performing a tracing of assets.
2. Financial Calculations:
• Calculating economic damages.
• Performing present value calculations utilizing appropriate discount rates.
• Performing a regression or sensitivity analysis.
3. Technological Tools:
• Utilizing a computerized application such as a spreadsheet, database, or computer model.
• Utilizing charts and graphics to explain the analysis.
Step 5. Reporting
Report Issuance: The final step in forensic accounting involves issuing a detailed report.
Content: The report contains information on fraudulent activities discovered, including evidence summary,
loss estimation, and identification of individuals involved.
Structure: It encompasses sections detailing the assignment nature, investigation scope, approach used, scope
limitations, and findings or opinions, supported by necessary schedules and graphics.
Fraud Scheme Analysis: Discussing how the fraud scheme was orchestrated and identifying any circumvented
controls.
Recommendations: The investigative team suggests improvements to the organization's controls to prevent
future fraud occurrences.
Step 6. Court proceedings
Court Proceedings: The investigation might culminate in legal proceedings against the suspect.
Team Involvement: Members of the investigative team are likely to participate in the court case, possibly as
witnesses. The collected evidence will be presented in court, with team members elucidating how they
gathered it and identified the suspect.

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