When should you consider a Forensic Audit and when should you consider an Internal Audit?

When should you consider a Forensic Audit and when should you consider an Internal Audit?

Forensic audits entail the examination of a firm’s financial records to identify irregular activities while internal audits involve the independent and objective assurance of an organization’s operations.

An organization should consider a Forensic Audit where: –

1. There is suspicion of fraud or theft;
2. There are unidentified reconciliation differences; or
3. A whistleblower hotline identifies issues such as assets stolen or other fraud issues, among others.

An organization should consider an Internal Audit where: –

1. Risks in operations, compliance, and reporting are unrecognized due to significant changes in industry, technology, laws and regulations.
2. Existing policies and procedures are not being followed.
3. The Board of Directors is concerned about specific business operations, among others.