Conventional (External) Auditor

Forensic Auditor (Accountant)

Audit is carried out by external auditors.

Audit is carried out by forensic auditors.

Possesses the normal accounting knowledge and professional training.

Possesses additional (investigative) training and skills in addition to the normal accounting knowledge and professional training.

Acts like a watch-dog.

Acts like a blood hound—hound for conclusive evidence.

Acts reactively.

Acts proactively and reactively.

Primarily out to make an opinion on financial statements, and detect and prevent fraud where necessary.

Primarily out to investigate and expose fraud and criminal transactions.

Examines income statements, statement of financial position, cash flow statements

and related financial records.

Examines manufacturing account, income statements, statement of financial position, directors’/auditor’s reports. Examines related party transactions and inter-corporate deposits.

Limits audit to components of financial statements.

Carries out cost audit, off balance sheet items audit & comparative analysis of financial statements.

Finds out deliberate misstatements only.

Finds out the misstatements deliberately.

Looks at only the numbers (all things being equal, takes numbers as they are).

Looks beyond the numbers (investigate numbers and figures).

Carries out audit within the scope of engagement letter, and in accordance with the entity concept in accounting and corporate law.

Pierces the veil of corporate entity

(where necessary) to establish the intentions of person(s) behind suspicious transaction(s).

Standards are set by professional and/or regulatory bodies.

Standards evolve from courts of law.