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. |