Investigative audits for dispute resolution, fraud detection, and recovery support.
A Forensic Audit is a highly specialized, investigative examination of a company's financial records designed to detect fraud, financial misconduct, and regulatory non-compliance. Unlike a traditional audit that aims to provide a 'true and fair' view of financial statements using sampling techniques, a forensic audit operates on the premise that an anomaly exists, actively seeking legally admissible evidence of wrongdoing.
With the tightening of corporate governance norms in India, forensic auditing has become a critical tool for boards, investors, and regulators. The Companies Act, 2013, particularly under Section 447 (which deals with the severe punishment for fraud) and the active role of the Serious Fraud Investigation Office (SFIO), has made corporate fraud a strictly non-compoundable offense with massive repercussions. Furthermore, under the Insolvency and Bankruptcy Code (IBC), 2016, forensic audits are now routinely mandated by Resolution Professionals and the Committee of Creditors (CoC) to identify and report PUFE transactions (Preferential, Undervalued, Fraudulent, and Extortionate credit transactions) under Sections 43, 45, 50, and 66 of the Code. By combining deep accounting knowledge with digital forensics, data mining, and legal expertise, we trace the flow of funds, identify the ultimate beneficiaries of fraud, and quantify financial damages.
Best forBusinesses facing suspected fraud, disputes, or concerns.
ApproachDiscreet, evidence-driven, and methodical.
OutcomeA forensic report designed to withstand scrutiny.
A Statutory Audit assumes management's integrity and uses sample testing to ensure financial statements are broadly accurate for shareholders. A Forensic Audit is an investigative deep-dive that assumes misconduct may have occurred, testing 100% of data in suspected areas to gather evidence for legal action.
PUFE stands for Preferential (favoring one creditor over others), Undervalued (selling assets below fair market value), Fraudulent (transactions made with the intent to defraud creditors), and Extortionate (exorbitant credit terms). Forensic auditors trace these to help recover siphoned funds during insolvency.
Do not immediately confront the suspected individual, as they may destroy evidence. Secure their digital access logs and immediately engage an independent forensic auditor to discreetly investigate the claims, preserve evidence, and quantify the potential damage.
Requests typically come from the Board of Directors, the Audit Committee, investors/PE firms (during due diligence), Resolution Professionals (during insolvency), banks (if they suspect diversion of loan funds), or regulatory bodies.
Yes. The core objective of a forensic audit is litigation support. Our reports are drafted to serve as expert evidence in courts, arbitration panels, and before tribunals like the NCLT or authorities like the SFIO and EOW (Economic Offences Wing).
No. Modern forensic auditing relies heavily on digital data. We securely image (clone) your servers, ERP databases, and communication logs, performing our analysis off-site or in the background, ensuring zero disruption to your daily operations.
Tell us a little about your requirement and our team will get back to you with the right guidance and a clear next step.
