Forensic audit and financial audit are two frequently used terms in the Indian financial and accounting industry. However, both of these terms have different meanings and objectives.

A financial audit is an independent examination of a company’s financial statements with the aim of rendering an opinion as to whether the statements are a true and fair view of the company’s financial position and performance. A financial audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The purpose of a financial audit is to provide assurance to shareholders and other stakeholders that the financial information provided is reliable and free from material misstatements.

On the other hand, a forensic audit is an investigation into the financial and business operations of an organization. The primary focus of a forensic audit is to uncover fraud or other irregularities. A forensic audit is conducted with the purpose of uncovering fraud, misappropriation of funds, or other irregularities.

In India, a forensic audit is conducted when there is suspicion of fraud or any other illegal activity by the management of a company. A forensic audit helps to identify any discrepancies or discrepancies in a company’s accounts and can provide evidence to support criminal or civil proceedings.

The scope of a forensic audit is usually much wider than that of a financial audit. It examines the company’s books, records, and other documents in order to detect any discrepancies or irregularities. It may also involve interviews with employees and other third parties. It is important to note that a forensic audit is conducted only when there is suspicion of fraud or any other illegal activity.

In summary, a financial audit is an independent examination of a company’s financial statements to provide assurance to shareholders and other stakeholders that the financial information provided is reliable and free from material misstatements. A forensic audit is an investigation into the financial and business operations of an organization to detect irregularities and uncover any fraud or other illegal activity. Both of these terms are essential in the Indian financial and accounting industry and are used to ensure the accuracy of financial records.