ACCA AAA · Chapter 28
Forensic audits
Your chapter at a glance. Open any section, or keep the whole map in view.
Purpose, investigation and evidential reporting
Forensic audit scope, preserve, investigate, report
Distinguish terms
- Forensic accounting: skills for financial/legal matters
- Investigation: gather, analyse and evaluate evidence
- Forensic audit: audit techniques within an investigation
Potential subjects
- Fraud, bribery, laundering or professional negligence
- Insurance claims, disputes or asset recovery
- Findings may support negotiations or legal proceedings
Professional duties
- Integrity, objectivity, competence and due care
- Document reliable evidence; stay within scope
- Expert witness assists court, not appointing party
- Do not withhold unfavourable relevant evidence
Before accepting
- Purpose, users, use and management integrity
- Ethical conflicts, confidentiality and access
- Competence, resources, timing and specialist support
- Clear scope capable of producing useful findings
Agree terms
- Matters/period, responsibilities and access
- Report form, users, distribution, deadline and fees
- Assurance, factual findings or expert opinion?
Plan investigation
- Allegations, previous work, systems and controls
- Source/location/reliability of evidence
- Risk of alteration, concealment or destruction
- Preserve evidence and document chain of custody
Insurance claim
- Read policy and contemporaneous police report
- Reconcile records and quantify insured loss
- Check CCTV and investigate other reconciling items
Suspected fraud
- Examine suspect items or specified full population
- Obtain external copies if originals destroyed
- Compare trends and test controls that failed
Bribery relating to contracts
- Analyse payments to agents and connected parties
- Inspect terms, authorisation and commercial rationale
- Review correspondence and interview relevant staff
Design
- Specify evidence, source and investigative purpose
Evaluate evidence
- Relevant, reliable, consistent and custody documented?
- Resolve contradictions and gaps
- Corroborate interviews with records/third parties
- Support every finding within agreed scope
Report
- Purpose, users, procedures, evidence and limitations
- Separate factual findings from opinions/conclusions
- Avoid unsupported legal attribution of fraud
- State distribution restrictions and assurance if any
Compared with financial statement audit
- Bespoke scope; may be urgent or court-facing
- Small items may expose a pattern or participant
- Specialist interviews and targeted data searches
- An AUP-style factual report provides no assurance
Want it on paper? Download the PDF, or print this page.