What Is Forensic Auditing?

Forensic auditing encompasses a wide array of activities, generally involving investigative efforts conducted by accountants. In essence, accountants delve deeply into a company’s financial affairs, particularly if there are suspicions of fraudulent activities. In Malaysia, Forensic Audit Services are sought to examine such matters, potentially even serving as expert witnesses in legal proceedings if necessary. It’s important to differentiate this from the mandatory annual Statutory Audit Services in Malaysia, required for all companies. When engaging Forensic Audit Services in Malaysia, it’s crucial to select a competent team for the task.

The types of fraud typically investigated in this context include:

  • Corruption

  • Misappropriation of assets

  • Falsification of financial statements

The Scope of Forensic Audit Services in Malaysia

Special audits may be conducted even in the absence of suspected fraudulent activities, as they can assist in resolving various financial-related matters. These services extend to financial disputes arising from business closures and matrimonial disputes, including insurance claims.

The primary responsibility of the forensic team is to uncover any potential fraud through evidence gathering and financial audit procedures. This entails:

  • Evidentiary collection.

  • Evidence review.

  • Client reporting.


Regarding Statutory Audit Services in Malaysia, this involves:

  • Internally reviewing the company’s controls.

  • Compiling, auditing, and reviewing financial reports and statements.

  • Assessing risks and providing recommendations.

  • Evaluating accounting estimates and their feasibility.


If fraud is detected, the following steps are taken:

  • Identifying involved parties.

  • Quantifying the amount of fraud, including client financial losses.

  • Presenting findings to relevant parties, such as the client and court.


Audit techniques are employed to gather evidence, including determining:

  • Duration of the fraud.

  • Methods used to perpetrate the fraud.

  • Concealment techniques employed by perpetrators.


The Forensic Audit Services team in Malaysia must also collect evidence for potential court proceedings, which may include:

  • Suspect motives.

  • Possible collusion among suspects.

  • Physical evidence from the crime scene.

  • Relevant documents.

  • Attempts to destroy evidence.

  • Statements made by the suspect during arrest.

What the Statutory Audit Services in Malaysia Process Involves and Do You Need It?

Every company registered in Malaysia is mandated to conduct financial audits. Furthermore, they must enlist the services of a firm providing Statutory Audit Services in Malaysia. This ensures an examination of the company’s financial statements for compliance with the reporting standards outlined in the Companies Act 2016.