The Banking Executive Magazine - February 2022

Level Up Forensic Skills of Arab Banks audit's legal framework. Forensic audits cover a large spec- trum of investigative activities. There may be a forensic audit to prosecute a party for fraud, embezzlement or other financial crimes. The auditor may be called in during the process of a forensic audit to serve as an ex- pert witness during trial proceedings. Forensic audits could also include situations that do not involve finan- cial fraud, such as bankruptcy filing disputes, closures of businesses, and divorces. Forensic audit investigations may ex- pose, or confirm, various kinds of il- legal activities. Normally, instead of a normal audit, a forensic audit is used if there is a possibility that the evidence gathered would be used in court. The forensic audit process is similar to a traditional financial audit — planning, gathering evidence, and writing a report — with the addi- tional step of a possible appearance in court. The lawyers on both sides offer evidence that the crime is either discovered or disproved, which de- cides the harm sustained. They ex- plain their conclusions to the defendant should the case go to trial before the judge. Forensic Audit Steps A forensic audit comprises the fol- lowing steps: • Planning the Investigation: The forensic auditor and the team will plan their investigation in order to meet their objectives. • Collecting Evidence: The evidence gathered should be sufficient to prove in court the identity of the fraudster(s), reveal the details of the fraud scheme and document the financial loss suf- fered and the parties affected by the fraud. • Reporting: A forensic audit will need a written report on the crime to be given to the client, so that if they desire, they can continue to file a legal case. • Court Proceedings: During court proceedings, the forensic investigator must be pres- ent to clarify the evidence col- lected and how the suspect(s) were found by the team. As such forensic audit is used to ex- amine and evaluate a firm's or indi- vidual's financial records to derive evidence used in a court of law or legal proceeding. Forensic auditing is a specialization within accounting, and most large accounting firms have a forensic auditing department. Forensic audits require accounting and auditing procedures and expert knowledge about the legal frame- work of such an audit. Key takeaways • A forensic audit is an examination and evaluation of a firm's or indi- ISSUE 158 FEBRUARY 2022 the BANKING EXECUTIVE 11