Understanding Forensic Auditing

Forensic auditing encompasses a broad range of investigative activities carried out by accountants. This process involves a thorough examination of a company’s financial matters to uncover any suspicious activities. In Malaysia, forensic audit services are specifically engaged to investigate potential fraudulent activities and may involve acting as expert witnesses in court proceedings. It is important to distinguish forensic audits from the mandatory annual statutory audits required for all companies in Malaysia. Engaging the right forensic audit team is crucial for effectively addressing such issues.

Types of Fraud Investigated in Forensic Audits:

• Corruption

• Misappropriation of assets

• Falsifying financial statements

The Scope of Forensic Audit Services in Malaysia

Special audits can be conducted even in the absence of suspected fraudulent activities. These audits may be engaged to resolve various financial matters, including disputes related to business closure or matrimonial disputes involving insurance claims. The primary objective of the forensic audit team in these cases is to provide clarity and resolve any financial discrepancies.

Key Responsibilities of the Forensic Audit Team:

• Uncover Evidence of Fraud: The forensic team is responsible for identifying any fraudulent activities.

• Gather Relevant Evidence: Collecting all necessary documentation and information.

• Conduct Financial Audits: A thorough examination of the company's financial records.

The Forensic Audit Process:

• Gather Evidence: Collect all pertinent data and documents.

• Review Evidence: Analyze the collected evidence for accuracy and relevance.

• Report Findings: Present a detailed report to the client, outlining the findings and any recommendations.

Statutory Audit Services in Malaysia Overview

During Statutory Audit Services in Malaysia, the process entails several key steps:

1. Internal Controls Review: Examining the company's internal controls.

2. Financial Report Auditing: Compiling, auditing, and reviewing financial reports and statements.

3. Risk Assessment: Evaluating risks and providing recommendations.

4. Accounting Estimates Evaluation: Assessing accounting estimates and their feasibility.

Dealing with Fraud Incidents

In case of fraud occurrences, the following actions are necessary:

1. Identify Involved Parties: Determine all parties implicated in the fraud.

2. Quantify Fraud Losses: Assess the financial impact of the fraud, including client losses.

3. Present Findings: Report findings to relevant parties, such as the client and court.

Employing Audit Techniques

Audit techniques are utilized to gather evidence, focusing on:

• Duration of Fraud: Determine how long the fraud persisted.

• Method of Fraud: Investigate how the fraud was executed.

• Concealment Techniques: Examine how the fraud was concealed.

Collecting Evidence for Legal Proceedings

Forensic Audit Services in Malaysia requires gathering evidence for legal proceedings, including:

• Suspect Motives: Understand the motives behind the fraud.

• Collusion Investigation: Determine if there was collusion among suspects.

• Physical Evidence: Collect any physical evidence from the crime scene.

• Documented Evidence: Gather documents related to the fraud.

• Evidence Preservation: Prevent attempts to destroy evidence.

• Suspect Statements: Record any statements made by suspects during the investigation.

What the Statutory Audit Services in Malaysia Process Involves and Do You Need It?

All companies incorporated in Malaysia are mandated to conduct financial audits and engage an audit firm providing Statutory Audit Services in Malaysia. These services ensure that a company's financial statements adhere to the reporting standards outlined in the Companies Act 2016.

For further inquiries about Forensic Audit Services in Malaysia, feel free to reach out to us. We're here to assist you.