You find yourself in a bad situation – you are concerned that an employee has taken advantage of your organization and mishandled company funds. Now what? Do you need to bring in auditors? What is the different between an audit and one of those, what do you call it, fraud examinations?
Financial audits are recurring reviews of financial statements. They provide an independent opinion on whether financial statements are presented fairly but are NOT designed to detect fraud. Often they are completed to give a level of comfortability to stakeholders.
If you are looking to answer the questions of whether fraud has occurred or is occurring, who might be responsible, what amount was taken and having documentation prepared to move forward, you need a fraud examination. Fraud examinations are nonrecurring examinations of financial records designed to detect fraud and resolve specific allegations, without any opinion on financial statements.