INVESTIGATIVE AUDITS

INVESTIGATIVE AUDIT

Ezeilo (2010) defined investigative audit as “audit that are performed to investigate incident of possible fraud or misappropriation of institution funds.” It is usually seen as an audit that takes place as a result of report of unusual or suspicious activity on the part of an individual or a department.

It usually focuses on specific aspects of the work of a department or individual in relation to fraud and corruption, so as to examine how the systems can be reinforced for fraud prevention and detection.

Ezeilo (2010) further explains that investigative audit is a valuable part of audit toolkit because it focuses on the risks that threaten achievement such as risk of fraudulent claims for expenditure, fraudulent provision of services to an organization or fraud and evasion of revenue payments.

It also concentrates on the standards of financial management, implementation of internal control regimes and electronic services.

It is also worth noting that this audit differs from other audits because they are normally conducted without first notifying the personnel who may be affected by the findings.

In carrying out this investigation, the forensic auditors who are usually referred to as investigative auditors have certain principal tools used in investigating, and they include;

i. Information (informants)
ii. Interviews (witnesses)
iii. Interrogation (suspects)
iv. Instrumentation (crime laboratory, comparison microscopes, polygraph etc.).

Out of all these tools, information contribute to the solution of crime more than the other tools, although there are some evidence that instrumentation could be used more frequently and more effectively to solve a greater number of crimes.