Skip to content

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

Kaveri Pharma Ltd's internal audit department reviews the effectiveness of the procurement approval process throughout the year and reports to the Audit Committee. A separate forensic auditor is later hired after an anonymous tip about a kickback scheme in the same department. How does the forensic engagement differ from the internal audit?

The forensic engagement is reactive and focused on a specific allegation, such as the kickback tip, while internal audit is a continuous review of controls and risk management. Forensic work seeks facts and evidence about wrongdoing rather than routine assurance on processes.

  1. AIt is reactive and focused on a specific allegation, whereas internal audit is continuous and focused on controls and riskCorrect
  2. BIt is performed by employees of the company only, unlike internal audit
  3. CIt covers every function of the company routinely, unlike internal audit
  4. DIt does not require any documentary evidence, unlike internal audit

Explanation

Internal audit is an ongoing, risk and control oriented review by or for management. Forensic audit is triggered by a specific suspicion or allegation and is investigative. The other options misstate the scope, the people involved or the need for evidence.

Did you get it right without looking?

One question tells you little. A timed set on Basic Concepts of Forensic Audit shows your real accuracy, how long you take and where you lose marks.

Practise Basic Concepts of Forensic AuditFree diagnostic mock

More Basic Concepts of Forensic Audit questions