Forensic audit in Sri Lanka is an investigation and evaluation of an organisation’s financial information for use as evidence in court. A forensic audit can be conducted in order to accuse a party under following three wide range of investigations such as;
Corruption
There are three types of corruption frauds: conflicts of interest, bribery, and extortion. Research shows that corruption is involved in around one third of all frauds.
Asset misappropriation
The most common frauds are those involving asset misappropriation, and there are many different types of fraud which fall into this category such as cash theft, fraudulent payouts, inventory frauds etc…
Financial statement fraud
This is also known as fraudulent financial reporting, and is a type of fraud that causes a material misstatement in the financial statements. It can include misrepresentation of accounting records; omission of transactions, balances or disclosures from the financial statements; or the misapplication of financial reporting standards.
The key benefit to the Company by conducting forensic audit is the report can be used as an evidence for court proceedings.
In addition, the forensics audit firms will recommend improvements to controls within the organization in order to prevent any similar frauds occurring in the future.
