Forensic Auditor – What it is, definition and concept

A forensic auditor is in charge of locating accounting fraud behavior in a company or institution. Using auditing techniques, it analyzes these aspects in order to detect bad practices.

As a professional, the forensic auditor is in charge of putting into practice the proper aspects of forensic auditing.

This discipline stands out for the search for criminal or illicit elements in accounting terms.

In this sense, its main mission is the detection or recognition of possible fraudulent practices from the accounting point of view in a specific organization.

Forensic auditor methodology

As in other common practices in all types of auditing, the auditor specialized in forensic work has some techniques for the performance of their work:

  • Detailed accounting analysis: The bulk of the forensic audit will be the detailed evaluation of the accounting books and financial statements of the target organization.
  • Audit report: As a conclusive element of your work, you must capture your results or observations in a detailed report.
  • Multidisciplinary profile: The need to know in detail the accounting legislation and compliance with it by the company implies that the professional auditor must have training in law and specific economic knowledge.

For all the above, it is necessary that the auditor in charge of forensic work is perfectly qualified from the accounting point of view. It is for this reason, which requires an academic preparation aimed at this performance.

Alternatively, the demand for these professionals has been increasing in recent decades due in large part to the development of new economic and accounting-related regulations.

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Job aspects of the forensic auditor

Within this audit modality, it is possible to distinguish between two main phases: the preventive forensic audit and the deductive forensic audit.

Although both phases can be approached by the same individual or team of professional auditors, it is also frequent that it is developed independently, due to its different analytical aspects:

  • Preventive forensic auditor: Through its study of the organization, it makes it easier for it to avoid possible fraudulent behavior.
  • Deductive forensic auditor: The work of this professional will be related to the in-depth investigation of possible fraud or bad accounting practices that have already occurred.

In this sense, it is usually more common for preventive action to be developed by internal professionals of the organizations.

Alternatively, a deductive forensic auditor is usually established by public bodies, such as official economic institutions (cases of possible economic crimes) or subcontracted by the company itself in cases of investigations or required audits.

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