Forensic audit and fact-finding reviews
An independent, evidence-based examination of books and transactions where there are concerns about irregularities, leakage or misstatement. Forensic work establishes facts and records them in a form that owners, boards and legal counsel can rely on.
Scope
What the work covers
A statutory audit is designed to give an opinion on whether financial statements are fairly presented. It is not designed to look for every irregularity. A forensic review starts from a specific concern, such as unexplained losses, suspicious vendors, stock shortages or a dispute between partners, and follows the trail through documents and data until the facts are clear.
Findings are reported factually, with the evidence for each, so that the business can decide what action to take: recovery, disciplinary action, insurance claims, legal proceedings or simply better controls.
- Transaction trail reviews from source document to ledger to bank
- Vendor master and payment analytics: duplicates, related parties, split payments, round amounts and unusual timing
- Payroll reviews for ghost employees and unauthorised changes
- Physical verification support for inventory and fixed assets, and reconciliation to books
- Review of revenue and receivables for fictitious sales or teeming and lading
- Partnership and shareholder dispute accounting
- Review of the control gaps that allowed the issue, with practical remediation
Approach
How the work is done
Agree the mandate
The concern, scope, period and access to records are agreed in writing, along with how confidentiality and evidence will be handled.
Secure the data
Ledgers, bank statements and system exports are obtained in full, with copies preserved, before any analysis begins.
Analyse and test
Data analytics on the full population identifies patterns and outliers, which are then tested against documents and, where appropriate, explanations from staff.
Report
A structured report sets out the scope, procedures, findings and evidence, and separates facts from interpretation.
Getting started
Records to keep ready
- Full ledger and journal exports for the period under review
- Bank statements for all accounts, including closed accounts
- Vendor and employee master data, with change logs if available
- Purchase orders, invoices, delivery records and approvals for sampled transactions
Background
Ryan Vaz, FCA is a Certified Forensic Accountant (ICAI, 2015) and has worked inside large finance functions, which helps in understanding how controls are bypassed in practice. Python-based analytics is used to test entire ledgers rather than samples. See experience and expertise.
Fees
Fees depend on the scope of work, the volume and condition of records and the time required, and are confirmed in writing in an engagement letter before work begins.
Questions about forensic audit
What is the difference between a forensic audit and a statutory audit?
A statutory audit gives an opinion on whether financial statements are fairly presented, using sampling and materiality. A forensic audit investigates a specific concern in depth, often testing every transaction in an area, and reports facts and evidence rather than an opinion on the accounts.
When should a business commission a forensic audit?
Typical triggers are unexplained cash or stock shortages, a tip-off about a vendor or employee, margins that fall without a business reason, disputes between partners or shareholders, or a lender or investor asking for an independent review.
How long does a forensic review take?
It depends on the scope, the volume of transactions and how quickly records can be obtained. A focused review of one area, such as vendor payments over two years, can often be completed in a few weeks once data is available.
Is a forensic report usable in legal proceedings?
A forensic report is prepared with evidence for each finding so that it can support legal counsel. Where proceedings are expected, the scope and approach should be agreed with the business's lawyers at the outset.
Contact
Phone +91 95384 16161 or email ryan@vazassociates.in. Office opposite Maxus Mall, L.T. Road, Borivali West, Mumbai 400092. Work can also be handled remotely.