What it is:
Forensic auditing examines individual or company financial records as an investigative measure that attempts to derive evidence suitable for use in litigation.
How it works/Example:
Forensic auditing can sometimes be referred to as forensic accounting.
Forensic auditing combines investigative techniques along with an understanding of accounting principles to determine if there are suspicious practices hiding beneath company or individual financial records and statements.
Certified forensic auditors are trained to present their findings in legal proceedings that concern fraud, embezzlement, or financial disputes.
Why it matters:
Forensic auditing is important because it presents financial statement and transaction information in a way that is suitable for court.