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CMA Final · Cost and Management Audit · Forensic Audit

Which statement best distinguishes a forensic audit from a statutory financial audit?

A forensic audit is investigative and focused on suspected or alleged fraud, with detailed examination and evidence prepared for possible legal proceedings. A statutory audit instead gives an opinion on the true and fair view of financial statements, using sampling and materiality, on a periodic basis.

  1. AA forensic audit expresses an opinion on true and fair view of financial statements
  2. BA forensic audit is investigative, targets suspected fraud and produces evidence suitable for legal proceedingsCorrect
  3. CA forensic audit relies only on sampling and materiality limits
  4. DA forensic audit is performed only once in a financial year by the appointed auditor

Explanation

Forensic audit is carried out with a specific suspicion or allegation, examines transactions in detail without relying on materiality, and aims to gather evidence usable in court. A statutory audit gives an opinion on the true and fair view using sampling and materiality, and is done periodically.

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