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A fraud audit is a comprehensive review of a business’s financial statements. A fraud audit is performed with the objective to detect cases of fraud in a business.
The process followed while carrying out a fraud audit is more extensive than a standard process of audit. There are certain forms of frauds where there is extremely low money involved, and that may be less than the usual materiality level.
There are certain kinds of frauds that must be detected at an early stage, as they could lead to huge loss to the company or it could have a material effect on the company’s financial position. Therefore, at that moment of time, the role of an auditor is to gather evidence about the fraud, which could also lead to being an expert witness in a legal proceeding in case it occurs.
A fraud audit is more of a consulting service than an audit type, as the result does not entail issuing an opinion on a client’s financial reports.
A fraud audit will entail more interviews than a regular audit, as the auditors need to look for signs of employees who may have recorded unusual activity that reflects fraud.
One of the most expensive exposures companies’ faces is employee fraud, but most companies wait until a fraud occurs to institute fraud controls instead of instituting fraud controls to prevent such activities.
When a company is suspected of having suspicious activities like money laundering, terror funds or fraudulent operations on its part, it necessitates an investigation of its account, financial records and all the business processes. The process of investigation comes to be known as an investigative audit. Stringent audit procedures are conducted in order to trace the flow of money and assets to gain evidence. After the identification of the suspect and collection of adequate audit evidence, the case will be put forward in the court.
A fraud audit is a thorough review of the financial reports of a company. A fraud audit is done with the goal of identifying instances of fraud in a company.
A forensic audit is an evaluation and analysis of the financial books of an individual or company to procure figures, which can be utilized in the court of law. A forensic audit is a study and analysis of the financial books of a company or an individual. In common parlance, “forensic” refers to the use of scientific methodology and techniques in an investigative process.
1• Real-time service
2• Maintain Ethical Values
3• International Financial Reporting Standards (IFRSs)
4• Complies 100% auditing standards and relevant legal provisions
NAK Auditing L.L.C is the Audit division of CLA Emirates – Emirates Chartered Accountants Group is having 25 years of experience in the region provides quality service in the field of Audit, Taxation and Company formation, etc.
1• Cash Embezzlement
2• Sorting of Accounts Payable Fraud
3• Opening a fictitious laptop supplier account to steal cash,
4• Utilization of Company’s cash for personal spending etc
Avoiding and detecting accounting frauds, it is recommended to have a trustworthy experienced consultant or employ an expert to check and reconcile accounts from time to time.
Implementation of rigorous internal control procedures on account functions, rotate employee duties in accounts payable & receivable department, rotate cashier duties from time to time, segregate the duties of operations and account etc are some of the fraud detection and prevention processes.
1• Corporate irregularities
2• Whistle blower allegations
3• Asset misappropriation
4• Regulatory violation
5• Improper business relationship
6• Financial reporting fraud
6• Suspicious transactions
7• Bribery and corruption
Here are some common questions about Fraud Investigation Audit
These audits should be conducted by qualified forensic auditors or specific scrutinizing bodies appointed by the UAE regulators. Such investigations are often headed by the UAE Financial audit Authority or other approved professional forensic firms.
Common triggers include:
Typical phases include:
Yes. Organizations must disclose frauds of a specific threshold to the control and law enforcing agencies. In the case of financial institutions, the reporting of any fraud incidence has to be done to the Board of Directors and other regulating bodies.
The UAE has stringent anti-fraud and anti-corruption laws that include Federal Decree-Law No. (41) of 2023 that is accompanied by anti-money laundering (AML) laws. The crimes that are discovered during the audits of fraud cases should be disclosed to the federal public prosecution.
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