Forensic Audit Services in Dubai

Forensic Audit

The number of fraudulent activities and ambiguous financial activities has been accelerating all over the world. Consequently, businesses are exposed to risks of fraudulent activities.

Forensic Auditing has established itself as a dynamic and strategic tool in combating corruption, financial crimes, and fraud through investigations and resolving allegations of fraud and embezzlement. Thus, a new area of auditing, known as Forensic Audit, was needed to detect fraud in companies that were suspected of fraudulent transactions.

The word forensic comes from the Latin word forensic, meaning "Of or before the forum." It is -

✔      Relating to, used in, or appropriate for courts of law, public discussion, or argumentation.

✔      Relating to using science or technology in the investigation and establishment of facts or evidence in a court of law.

Forensic Accounting

The integration of accounting, auditing, and investigative skills yields the specialty known as Forensic Accounting. It is the study and interpretation of accounting evidence. It is the application of accounting methods to the tracking and collection of forensic evidence, usually for the investigation and prosecution of criminal acts such as embezzlement or fraud. Forensic Accounting can sometimes be referred to as Forensic Auditing.

Forensic Investigation

It is also known as the forensic audit. It is the examination of documents and the interviewing of people to extract evidence. Forensic Accounting examines individual or company financial records as an investigative measure that attempts to derive evidence suitable for use in litigation.

A forensic audit can be conducted in order to prosecute a party for fraud, embezzlement, or other financial claims. In addition, an audit may be conducted to determine negligence in addition, an audit may be conducted to determine negligence.

Forensic Auditing is very different from Forensic accounting. Forensic accounting is like a fraud investigation where the fraud is committed by employees, vendors, and customers who are against the Business. Whereas Forensic Audit is required when there is fraud or crime in the Business. This may involve Shareholders, Owners, Management, and Partners themselves indulging in fraud.

Steps while conducting a Forensic Audit in Dubai, UAE

The steps or process involved while conducting a Forensic Audit will be similar to that of a normal Financial Audit with one additional and important step of representation or appearance in the Court of Law or Legal Proceeding. The evidence gathered would need to be presented in the Court of Law. Largely the steps in Forensic Auditing will include:

✔               Planning the Audit Investigation.

✔               Collecting Evidence.

✔               Reporting.

✔               Presentation in Court of Law.

Forensic Auditors in Dubai, UAE

A Forensic Auditor is often retained to analyze, interpret, summarize, and present complex financial and business-related issues in a manner that is both understandable and properly supported. Forensic Accountants are trained to look beyond the numbers and deal with the business reality of the situation.

A Forensic Auditor must initially consider whether his/her firm has the necessary skills and experience to accept the work. Forensic audits are highly specialized, and the work requires detailed knowledge of fraud investigation techniques and the legal framework. The forensic auditor needs to have an understanding of various frauds that can be carried off and how evidence needs to be collected.

Forensic Auditors can be engaged in public practice or employed by insurance companies, banks, police forces, government agencies, and other organizations.

In order to properly perform these services a Forensic Auditor must be familiar with legal concepts and procedures and have expertise in the use of IT tools and techniques that facilitate data recovery and analysis. In addition, a Forensic Auditor must be able to identify substance over form when dealing with an issue.

The services rendered by forensic accountants are in great demand in the following areas:

✔               Criminal Investigation.

✔               Professional Negligence Cases.

✔               Arbitration service.

✔               Fraud Investigation and Risk/Control Reviews.

✔               Settlement of insurance claims.

✔               Dispute settlement.

Importance of Forensic Auditors in UAE

They can resolve the matters by combining accounting knowledge & experience with respect to:

●                Fraud Prevention.

●                Fraud Detection.

●                Risk Management.

●                Filing requirements.

●                Court systems.

●                Investigative methodologies.

●                Internal Controls Implementation and Review.

●                Compliance and Regulatory Functions.

●                Evidence Collection and Analysis.

●                Assignments with regulatory agencies like SEBI, RBI, EOW, etc.

●                Professional body to provide expertise and literature in this fast-growing field.

●                Communicating with audiences from attorneys & judges to victims & suspects.

Forensic Audit Techniques

Detecting fraud is difficult, especially frauds involving material financial statement misstatements, which occur only in about 2 percent of all financial statements. Fraud is generally concealed and often occurs through collusion. While fraud detection techniques will not identify all fraud, the use of sound techniques can increase the likelihood that misstatements or defalcations will be discovered on a timely basis.

Some of the techniques that a forensic auditor may use are listed below:

1.               General Audit Techniques

●                Testing defenses

2.               Statistical & Mathematical Techniques

●                Trend Analysis

●                Ratio Analysis

3.               Technology based /Digital Forensics Techniques.

4.               Computer Assisted Auditing Techniques (CAATs).

5.               Generalized Audit Software (GAS).

6.               Common Software Tool (CST).

7.               Data Mining Techniques.

8.               Laboratory Analysis of Physical and Electronic Evidence.

Forensic Audit Report

A Report is a statement of collected & considered facts, so drawn up as to give clear and concise information to persons who are not already in possession of the full facts of the subject matter of the report.

The Forensic Audit Report is nothing but statements of observation gathered & considered while proving conclusive evidence. After the investigation is complete, the auditor is expected to give a report on the findings of the investigation, and also a summary of the evidence and conclusion about the loss suffered due to such fraud. It is an important part of the audit as it provides the results of the audit conducted by the auditor.

The main factors to be considered for the various ways of presentations of written reports are:

⮚                Nature of business of the organization.

⮚                Nature of subject or aspect appraised.

⮚                For whom the report is intended.

⮚                The purpose for which the report is prepared.

⮚                Management attitude, directives, and needs.

⮚                Forensic auditor's approach and caliber.

⮚                The extent of details required by the auditor and management.

Points to be kept in mind while reporting:

✔               Clear thinking.

✔               Keep the reader uppermost in mind.

✔               Unbiased approach.

✔               Impact of the report.

✔               Facts and figures to be in proper sequences and suggestions to prevent fraud in the future.

Note from BRS

We can help you with investigating corporate fraud activities, dispute settlement, and provide assistance in some other forensic auditing services in Dubai like Anti-money Laundering, misappropriation of assets, suspicious transactions, fraudulent financial reporting, etc.