Review and Analysis of Forensic Auditing

Abstract

The internal auditors play a very significant role in maintaining accounting ethics; however, it is also appropriate to assert that the working of the internal auditor is being controlled by the management of the organization. The external auditors remain helpless due to manipulative data shown by the authorities. Henceforth, the managements continue to groom their tactics towards unethical practices without being detected on the surface. Hence, the internal or external auditors may not be enough to identify the emerging frauds in the corporate world such as white-collar crimes which may occur in the form of corporate scams, cash embezzlement, insolvencies, corporate disputes, and possibly unethical financial transaction. This study has discussed the applicability of forensic auditing over external auditing using past Indian scenarios for the fraud detection as well as prevention. The chapter is conceptual and focuses on the magnitude of forensic auditing in the detection as well as prevention of frauds in the business enterprise.