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Question

Refer to the following information to answer the next 4 questions (Q13 to Q16) Audit is the examination or inspection of various books of accounts by an auditor followed by physical checking of inventory to make sure that all departments are following documented system of recording transactions. It is done to ascertain the accuracy of financial statements provided by the organisation. Audit can be done internally by employees or heads of a particular department and externally by an outside firm or an independent auditor. The idea is to check and verify the accounts by an independent authority to ensure that all books of accounts are done in a fair manner and there is no misrepresentation or fraud that is being conducted. All the public listed firms have to get their accounts audited by an independent auditor before they declare their results for any quarter.

________ examines and evaluates a firm's or individual's financial records to derive evidence used in a court of law or legal proceeding.

A Forensic Audit Correct Answer Incorrect Answer
B Cost Audit Correct Answer Incorrect Answer
C Financial Audit Correct Answer Incorrect Answer
D Investigation Correct Answer Incorrect Answer
E Supervision Correct Answer Incorrect Answer

Solution

A forensic audit is a process of conducting the audit of an organization or of an individual’s financial information, to produce the same evidence in the court. The forensic auditor’s report may help to nail and prosecute the parties involved in fraud, embezzlement, or other types of financial misappropriations.

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