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: –
- There is suspicion of fraud or theft;
- There are unidentified reconciliation differences; or
- A whistleblower hotline identifies issues such as assets stolen or other fraud issues, among others.
An organization should consider an Internal Audit where: –
- Risks in operations, compliance, and reporting are unrecognized due to significant changes in industry, technology, laws and regulations.
- Existing policies and procedures are not being followed.
- The Board of Directors is concerned about specific business operations, among others.