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CS Professional · Internal and Forensic Audit · Basic Concepts of Forensic Audit

A forensic auditor engaged by the board of Sagar Textiles Ltd. prepares a report on suspected diversion of funds. The report states that the CFO 'is guilty of fraud and should be prosecuted'. Which comment best reflects accepted forensic practice?

The statement is inappropriate because a forensic auditor should present evidence-backed facts and findings, not decide guilt. Determining whether a person is guilty of an offence is a judicial function reserved for the court, regardless of who engaged the auditor.

  1. AAcceptable, since the auditor was appointed by the board
  2. BAcceptable if the CFO has not responded to queries
  3. CNot appropriate, since the auditor should present facts and findings, leaving the determination of guilt to the courtCorrect
  4. DNot appropriate, since only the statutory auditor may mention fraud

Explanation

A forensic auditor reports factual findings supported by evidence and may state an expert view on them, but guilt is a judicial determination. Concluding guilt oversteps the role, regardless of who appointed the auditor.

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