Forensic Audit and Corporate Governance: Restoring Trust and Transparency

The ICAB webinar on forensic audit by Akhtar Sanjida Kasem highlighted the vital link between forensic auditing, fraud prevention, corruption control, and corporate governance in promoting trust and transparency. Forensic audit, meaning “suitable for court use,” applies investigative accounting to detect crimes like embezzlement and fraud. It uses methods combining compliance, propriety, and financial audits. The session emphasized governance principles of fairness, transparency, accountability, and responsibility as key to minimizing fraud risks. Boards play a crucial role in fostering ethical culture, oversight, and fraud risk management. The COSO-ACFE model outlines five components—governance, risk assessment, control, investigation, and monitoring. According to the 2024 ACFE report, organizations lose 5% of revenue to fraud annually, mostly through occupational fraud detected via tips. Common red flags include living beyond means, weak controls, and management override. Case studies showed diverse fraud types across industries, revealing governance and control failures. The webinar concluded that building a strong anti-fraud culture, enhancing technical capacity, and maintaining integrity and transparency are essential for sustainable governance.