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INVESTIGATIVE AUDIT

Investigative Auditing is the detection, tracing, quantification and prevention of fraud, money laundering and terror finance. Investigative Auditing involves the examination of accounts and the use of accounting procedures to discover financial irregularities and to follow the movement of funds and assets in organizations.

ADVANTAGES OF INVESTIGATIVE AUDIT:

  • It helps solve financial crimes: It can greatly help in solving financial crimes. These can involve bribery within government offices as well as fraud and money laundering within business organizations.
  • It helps monitor professionals: It can be used to assess the work of professionals, including accountants themselves. The findings from this assessment, in turn, can be used to file professional negligence claims against those who have been proven to have made critical errors.
  • It helps businesses with their finances: Businesses can use investigative audit to detect anomalies among their staff and with third parties they’re working with. For instance, a company can ask a investigative auditor to check an employee’s purchasing records to see if all of his purchases were for business use or if he diverted some for his personal use.

DUTIES OF AN INVESTIGATIVE AUDITOR:

  • Conducts investigations on assigned cases of complex and sensitive nature. Functions as the lead investigator on large scale investigations, coordinating investigative activities and directing a team of investigators.
  • Interviews complainants, witnesses and subjects to gather facts during investigations and audits.
  • Leads and conducts large scale audit/reviews, implementing work plans to evaluate the effectiveness of internal controls in protecting CCC’s resources, and assessing the compliance and performance of programs, operations and processes. Combines accounting knowledge with investigative skills to perform financial analysis and forensic auditing duties in support of investigations involving fraud, misappropriation of assets or mismanaged funds.
  • Gathers evidence through site visits and surveillance, leading investigators in surveillance activities and other evidence gathering activities.
  • Prepares detailed reports on actions taken during all phases of an investigation or audit/review. Uses photographic and video equipment in the conduct of surveillance work to observe criminal activities or acts of misconduct.
  • Maintains database of case records and reports on the status of assigned cases.

FUNCTIONS OF AN INVESTIGATIVE AUDITOR:

  • Analyzing Documents: A successful investigative auditor has exceptional analytical skills to study financial documents, processes and systems and draw accurate findings.
  • Producing Evidence: An investigative auditor not only works toward detecting fraud, but also producing sufficient evidence that incriminates the suspects.
  • Providing Recommendations: For organizations to minimize susceptibility to fraud, they must find ways to make their financial systems and processes foolproof. The investigative auditor might be called in to assess the soundness of an institution’s structure, to identify weakness and to make suggestions on how to improve.
  • Being the Auditor: Although investigative auditors have an academic background in finance, some pursue courses in law to gain advanced working knowledge of codes and administrative and legal provisions that regulate investigative auditing. Employers typically look for individuals with at least a bachelor’s degree in accounting or finance and a license to practice.

HOW IS IT CONDUCTED:

  • Accepting the Investigation: A forensic audit is always assigned to an independent firm/group of investigators in order to conduct an unbiased and truthful audit and investigation.
  • Planning the Investigation: Planning the investigation is the key step in a forensic audit. The auditor(s) must carefully ascertain the goal of the audit so being conducted, and to carefully determine the procedure to achieve it, through the use of effective tools and techniques.
  • Gathering Evidence: In forensic auditing specific procedures are carried out in order to produce evidence. Audit techniques and procedures are used to identify and to gather evidence to prove, for example, how long have fraudulent activities existed and carried out in the organization, and how it was conducted and concealed by the perpetrators.
  • Reporting: The reporting stage is the most obvious element in a forensic audit. After investigating and gathering evidence, the investigating team is expected to give a report of the findings of the investigation, and also the summary of the evidence and conclusion about the loss suffered due to the fraud.
  • Court Proceedings: The last stage expands over those audits that lead to legal proceedings. Here the auditors will give litigation support as mentioned above. The auditors are called to Court, and also included in the advocacy process. The understanding here is that they are called in because of their skill and expertise in commercial issues and their legal process.

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