What is a Forensic Audit?
Is there really such a thing as a forensic audit? We get asked by attorneys frequently if we can perform a forensic audit. The truth is, there is no official product or service that a CPA offers that is called a “Forensic Audit”. This is a term that has been bantered about in the legal community that has no basis in our standard professional literature. Consumers often believe that a CPA performing a “Forensic Audit” is going to find all fraud and misdoings. Unfortunately, this is a false assumption. CPA’s reports are issued as “Audits”, “Reviews”, “Compilations”, “Agreed Upon Procedures” or “Consulting Assignments”. We have professional standards for each. What are referred to as “Forensic Audits”, “Forensic Accounting” or “Fraud Investigations” are most often “Consulting Assignments”. Sometimes they are “Agreed Upon Procedures”, but these engagement are very limited in their ability to lead to expert testimony. With a “Consulting Assignment”, we attempt to define what the client is looking for as a deliverable and we design a program to allow us to offer an opinion (as a consultant) regarding the issues under investigation. We use our skill sets that have developed during our accounting, auditing and consulting experience to offer convincing and clear analysis of the subject matter. As a result, the cost of each “Forensic Audit” is dependent on the amount of scrutiny and analysis that the client wants. What we are to examine and how many transactions need to be “vouched” dictate costs. Remember, there are no rules on what we do in a “Forensic Audit”. Our work programs are designed in conjunction with the client, the lawyer and the amount of funds available for the project. If you have questions in regards to a “forensic audit” that you need, don’t hesitate to give our office a call. By: Kim Onisko, CPA