CS Professional · Internal and Forensic Audit · Audit and Investigations
A forensic report on suspected diversion of funds at Narmada Infra Ltd is being finalised. The auditor has strong suspicion that the CFO is guilty, but the documentary trail so far proves only that payments were made to a firm owned by the CFO's relative without approval. Which reporting approach is most appropriate?
The report should present the established facts, the evidence behind each, and the limitations of the work, without declaring guilt. Judging guilt is for the court or competent authority. Omitting the payments or declaring innocence would misrepresent what the evidence actually shows.
- AState that the CFO is guilty of fraud and should be prosecuted
- BState the facts established, the evidence supporting them, and the limitations, leaving legal conclusions to the competent authorityCorrect
- COmit the payments because guilt is not proven
- DConclude the CFO is innocent because no direct confession exists
Explanation
A forensic report sets out facts found, supporting evidence, methods and limitations, and avoids pronouncing guilt, which is for a court or authority. Omitting established facts hides relevant findings, and declaring innocence for lack of confession is unsupported.
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