Forensic Audit - Financial Investigations and Procurement Audit
What is Forensic Audit?
Forensic Audit -
is an advanced international tool for financial analysis, highly valued by executives, investors, and business owners for its ability to promptly identify hidden risks and enhance trust.
By applying modern technologies, forensic audit enables an in-depth analysis of an organization’s financial activities, minimizes losses, and implements effective measures to prevent threats.
Our approach ensures comprehensive financial security by providing objective and reliable data for strategic decision-making.
- Beware of fake organizations offering forensic services without proper practical experience or pretending to be working with us!
- Остерегайтесь поддельных организаций, предлагающих услуги форензик без должного практического опыта или прикрывающихся мнимым сотрудничеством с нами!
When Our Services Are Needed
When There Is a Need for a Forensic Audit
Preventing potential violations before an upcoming inspection
Risks identified in procurement, production, storage, sales, or financial accounting processes
Signs of financial leakage or misappropriation of funds
Obtaining an independent positive conclusion before leaving a managerial position
Taking a new position and assessing risks of violations by the previous team
Increase in expenses despite stable revenue levels
Need to protect investments or monitor the targeted use of financial resources
Lack of confidence in management from founders or higher authorities
Goals and Practical Value of Forensic Audit
Identifying Hidden Risks
Forensic audit aims to promptly identify hidden risks that may cause financial or reputational damage to executives, investors, and business owners.
Protecting Executives from Misconduct
In practice, executives who place trust in their employees often face challenges alone during inspections by regulatory authorities. In such situations, dishonest employees may expose their leaders to liability, resulting in financial losses and reputational damage.
Assessing Team Performance and Business Resilience
Forensic analysis also assists in evaluating the team’s reliability and stress resistance, identifying weak links, and improving management effectiveness in challenging situations.
Preventing Consequences and Building Trust
Timely engagement of forensic services helps significantly reduce or eliminate such risks. This prevents negative outcomes and strengthens the trust of investors and shareholders.
Protecting Executives from Misconduct
In practice, executives who place trust in their employees often face challenges alone during inspections by regulatory authorities. In such situations, dishonest employees may expose their leaders to liability, resulting in financial losses and reputational damage.
Assessing Team Performance and Business Resilience
Forensic analysis also assists in evaluating the team’s reliability and stress resistance, identifying weak links, and improving management effectiveness in challenging situations.
Forensic Audit Integrates
Forensic or Audit?
Differences Between Forensic Audit and Financial Audit
Forensic Audit
Focused on identifying, investigating, and preventing hidden risks, including fraud and other irregularities. Its primary purpose is to gather evidence to support management decisions, ensure financial security, and, when necessary, provide documentation for potential legal proceedings.
Financial Audit
Aimed at verifying the accuracy and reliability of a company’s financial statements in accordance with international or national accounting standards (e.g., IFRS, NAS). The auditor expresses an independent opinion on whether the company’s financial position is presented fairly and in compliance with established standards.
How we work
Working Methods
- Analysis of related-party relationships
- Forensic Check & Identification of Red Flags
- Review of accounting and tax records
- Interviews with employees and third parties
- Examination and analysis of counterparties
- Investigation of capital and asset diversion incidents
- Review of compliance with regulatory and legal requirements
- Use of technical monitoring tools
- Use of Polygraph (lie detector) when applicable
Certificates
Upon completion of the Forensic Audit, you will receive a Certificate assigning a reliability category.
Answers to questions
How is the confidentiality of services ensured?
All information related to the service provided is treated as confidential and showed only to the Client (an NDA – Non-Disclosure Agreement – is signed).
Upon completion of the work, the results and conclusions of the study are usually confidentially provided to the first manager (customer).
Which specialists provide the services?
Forensic procedures are carried out by certified forensic experts and auditors specializing in financial fraud investigations, audit reviews, and related services.
Our team includes:
forensic professionals;
auditors;
analysts;
lawyers;
financial experts;
tax consultants;
cybersecurity specialists;
corporate intelligence specialists.
Is a license needed to provide Forensic services?
Forensic procedures are conducted in accordance with International Standards on Auditing (ISA).
Our company is officially registered in the Register of Audit Organizations of the Republic of Uzbekistan.
What stages are included in the service process?
Initial meeting and discussion with management
Signing of the NDA (Non-Disclosure Agreement)
Client completes the request form to define the scope of work
Contract signing (if required, via electronic platforms)
Formation and approval of the audit team
Development and approval of the Audit Program
On-site audit procedures
Daily audit team briefings
Presentation of results
Expert confidential report and recommendations
How much do the services cost?
The cost depends on:
The object (nature of activity, volume of working capital);
The number of experts involved;
The location or remoteness of the analysis sites.
To calculate the cost, an application form must be completed.
What is the duration of the services?
The period depends on the complexity and multitasking nature of the work. After the initial visit and review of the scope of work, the duration of the service can be determined.
Some organizations choose to purchase an annual service subscription, which allows them to save considerable financial resources compared to maintaining in-house specialists (such as compliance inspectors, internal auditors, and other experts).
For example, one full-time employee with a salary of 15 million UZS per month costs around 180 million UZS per year, excluding bonuses and other payments. In many cases, over time, in-house employees may become involved in collusion schemes promoting illegal financial activities.
How is the Forensic Audit Program prepared?
The Forensic Audit financial investigation program is developed considering the specifics of each case and the Client’s requirements.
What methodology is used in conducting Forensic?
Forensic is a complex and responsible process that requires a high level of knowledge, skills, and experience.
The advantages of our company include Membership in the Association of Certified Fraud Examiners (ACFE) and partnership with European international organizations, which provides our company with the best international experience and methodology for performing the services provided.
What does the Client receive upon completion of the audit?
Upon completion of the work, an Expert-Analytical Report is confidentially provided to the management (Client), which outlines the facts and potential risk areas, as well as recommendations for their resolution to take preventive measures against negative consequences and financial losses.
The Weeknd - After Hours
Are your employees 100% satisfied with their salary?
Are your employees satisfied with their position in the organization?
Are you completely confident in your staff?
If you answered “No” - the probability of fraud is 50%.
Do you have an approved anti-fraud response plan?
Have you implemented a system for collecting electronic documentary evidence of financial misconduct?
Do you frequently change your audit firm?
Do you personally select the audit firm?
Have any cases of fraud been identified in your company during the past year?
If you answered “No” - Congratulations! There’s a 100% chance that someone is stealing from you.
Cases
Examples of projects we have worked on
Case on the «Engagement of a Tax Consultant»
A manufacturing enterprise encountered difficulties during a tax audit. The tax authorities raised significant claims regarding tax deductions and applied benefits, which resulted in the assessment of substantial fines and penalties. The company’s management decided to engage a tax consultant to resolve issues with the tax authorities and optimize the tax burden. However, after some time, it became apparent that the consultant’s recommendations led to even greater problems, as certain proposed schemes proved to be unlawful, and the company was subjected to additional penalties. This raised suspicions among management regarding the tax consultant’s bad faith and possible affiliation with competitors. To investigate these suspicions, the management decided to engage an organization specializing in financial investigations and employing certified forensic professionals.
Be cautious: some organizations, lacking experience and understanding in the field of forensic services, have begun offering such services by attracting clients with low prices. As a rule, these services are offered by interested parties within your organization.
Forensic specialists conducted interviews with the company’s financial and legal personnel who interacted with the tax consultant. His recommendations, submitted documents and contracts, as well as the results of tax audits before and after the engagement of the consultant, were reviewed. Additionally, data on the tax schemes proposed by the consultant were collected.
Forensic specialists analyzed the tax consultant’s recommendations and their compliance with legislative requirements. It was determined that a significant portion of the tax avoidance schemes bore characteristics of aggressive tax planning, and some of the consultant’s proposals directly contradicted the applicable tax legislation. It was also established that the consultant had not assessed current tax risks when proposing his solutions.
To assess a potential conflict of interest and the consultant’s possible affiliation with the company’s competitors, automated systems for identifying connections in corporate and tax registries were used. The results showed that the tax consultant had previously provided services to the company’s competitors, which could have been the cause of deliberate errors in tax planning aimed at causing harm to the company.
A financial assessment of the damage incurred by the company as a result of improper tax recommendations was conducted. Specialists compared the actual fines and penalties imposed on the company with the amount that would have been assessed had all tax regulations been properly complied with. It was determined that the company’s losses increased by 50% due to the use of unlawful schemes.
Forensic specialists prepared documentation for filing a claim against the tax consultant for the provision of bad faith services. The report presented evidence that the consultant had proposed schemes knowingly contradicting the law, as well as evidence of his possible conflict of interest.
Following the investigation, the company filed a claim against the tax consultant for bad faith provision of services and causing financial losses. The consultant was held liable, and part of the losses was recovered through court proceedings.
Based on the findings of the investigation, the company implemented internal control procedures in the selection of consultants, including the mandatory review of their recommendations by forensic specialists. This enabled the company to minimize tax risks in the future and avoid repeated errors.
Case on the «Procurement of Software»
A large organization entered into a contract for the acquisition and implementation of specialized software intended to automate its business processes. However, some time after the project commenced, the head of the organization suspected that the cost of the software and its installation services had been overstated, and that the software itself did not meet the specifications set out in the Terms of Reference.
Additionally, suspicions arose regarding the potential vested interest of the person responsible for procurement. To investigate these concerns, the management decided to engage an organization specializing in financial investigations and employing certified forensic professionals.
Be cautious: many audit firms, lacking experience and understanding in the field of forensic services, have begun offering such services by attracting clients with low prices. As a rule, these services are offered by interested parties within your organization.
Forensic specialists conducted interviews with key employees of the procurement department, as well as IT specialists involved in the implementation project. Initial data were obtained regarding the decision-making process and the selection of the software vendor. The contractual terms and the actual implementation of the project were also reviewed.
Using automated analytical systems, an analysis of the affiliation between the software vendor and the employees responsible for procurement was carried out. A specialized algorithm for identifying connections in corporate and public registries was applied. The analysis revealed an affiliation between the procurement officer and the primary subcontractor, indicating a potential conflict of interest.
An independent IT expert was engaged to assess the compliance of the acquired software with the requirements specified in the tender documentation. The expert review demonstrated that the delivered software was significantly simplified in functionality and did not meet the specifications set out in the Terms of Reference. Moreover, the implemented software was not adapted for integration with the organization’s existing systems, which required additional investment.
An analysis of the market value of comparable software solutions and their implementation services was conducted. Based on data from various sources, it was established that the contract value had been overstated by more than three times compared to the market price for similar solutions.
Forensic specialists assisted the client in preparing legal materials for filing a claim against the vendor and the procurement officer. The amount of damages was calculated, and evidence of improper actions in the conclusion and execution of the contract was provided. Additionally, it was recommended to initiate an internal investigation to identify conflicts of interest among the organization’s employees.
As a result of the conducted investigation, the existence of a conflict of interest and a significant overstatement of the cost of the acquired software were proven. Upon reviewing the evidence provided, the vendor agreed to conclude a settlement agreement. Under the terms of this agreement, the vendor undertook to refund part of the funds received and to perform additional modifications to the software in order to bring it into compliance with the requirements set out in the contract’s Terms of Reference.
Furthermore, based on the findings of the investigation, measures aimed at automating the internal control system within the organization were developed and implemented. This strengthened oversight over procurement processes and minimized the risk of similar situations occurring in the future.