Fraud is generally defined as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for inducing the other person to act, and upon which the other person relies with resulting injury or damage.
Fraud is perceived to be a potential internal control failures.
The auditor mindset towards fraud differs from the other “common” audits; the mindset should be investigative and anomaly-oriented.
Fraud risk also vary from industry to industry and nature of operations of an entity. Usually, fraud is more probable where volume of transaction is very high and automated controls are either not there at all or are quite weak. Involvement of high frequency of cash transaction in certain type of industries increases the fraud risk.
In last two decades, with the advancement of information technology, fraud risk has also advanced which makes it almost impossible to detect the fraud sometime.
We carry out Fraud investigation audit as per the customized requirement of a client. Usually, it is carried out in disguise of a regular internal audit if the possibility of fraud has not been fully ascertained.