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Investigative Audit (Forensic Audit)

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Forensic audit and investigation of financial irregularities

An forensic audit is a tool used when there are suspicions or indications of financial irregularities, embezzlement, concealment of assets, manipulation of results or other actions to the detriment of the company or its owners.


It is not a standard financial audit. It is a detailed, structured financial investigation focused on identifying fraud and securing evidence. It's conducted by experienced experts who know where to look, what to pay attention to and how to document findings in a process-useful way.

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A special area of investigative audits is projects related to M&A transactions. When a buyer feels cheated by a seller (mainly at the stage of disclosing financial data or falsifying it), or when sellers cannot agree with the buyer on the final earn-out amount due - then our team seeks to gather relevant evidence and data to support our client's claim.


A post-transaction investigative audit helps to determine whether the buyer was misled and whether there are grounds for a claim against the seller.


What does an investigative audit consist of?


An investigative audit is a specialized financial analysis conducted to detect irregularities, fraud or manipulation of financial data. Unlike a standard financial audit , it focuses on identifying facts, securing evidence, and preparing material that can be used litigatively.

When do you need an investigative audit?

An investigative audit is worth conducting whenever financial irregularities are suspected or evidence needs to be secured for a dispute.


  • You suspect that an employee, partner or contractor is acting to the detriment of the company,
  • The company's financial results do not agree with its actual operating condition,
  • You bought a company and discovered after the transaction that the financial data presented during due diligence was inconsistent with reality,
  • You are in litigation or arbitration in which an expert opinion or financial analysis of damages is required,
  • The financing institution (bank, fund) has doubts about the accuracy of data presentation,
  • You want to evaluate the possibility of claiming representations & warranties against the seller.
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Post-transaction investigative audit - investigating warranty claims


One of the most common uses of a post-acquisition investigative audit is after a deal has closed, when the buyer discovers that reality does not match what was presented in the sales process.


We verify whether financial data was manipulated, identify patterns of activity and quantify the value of the damage - so that the results of the investigation can serve as the basis for claims against the seller.


We have helped clients successfully pursue multimillion-dollar claims for misrepresentations - in one case, the client recovered damages equivalent to half of the transaction price paid.

Scope of the investigative audit

Our team applies investigative methodologies built on deep knowledge of accounting, corporate finance and fraud mechanisms. The scope of an investigative audit depends on the nature of the case, but most often includes:


  • analysis of financial records and transactions for patterns of fraud, performance manipulation and fraud,
  • identification of cash flows and potential hidden asset transfers,
  • analysis of large sets of financial data - looking for anomalies, deviations from expected patterns, unjustified adjustments,
  • assessing the reliability of historically presented financial results,
  • quantification of the value of damages for the purposes of litigation or arbitration claims,
  • preparation of a report suitable for use in litigation, arbitration or as evidence for law enforcement agencies,
  • close cooperation with the law firms conducting the proceedings.

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What is the difference between an investigative audit and a financial audit?


A standard financial audit serves to confirm the accuracy of financial statements. An investigative audit has a different purpose - to identify fraud, manipulation and acts to the detriment of the company, and to support litigation, arbitration or transactional claims.


Confidentiality and discretion


We understand that the very fact of conducting an investigative audit is sensitive information. We conduct all work with complete confidentiality, and the scope and form of engagement are tailored to the client's needs - including in situations where parallel legal proceedings or settlement negotiations are underway .

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