External Auditing is primarily conducted with a view to provide an opinion on whether the accounts drawn up by the management provide a true and fair view of the state of financial transactions of the company and the profits or losses incurred by the business in the accounting period under consideration of the Audit. The primary purpose of the external audit, some times also referred to as the statutory audit is to provide an assurance on the accuracy of the books of accounts and financial statements prepared by the management of the business. External auditors are typically Chartered Accountants.
Whereas forensic auditing is primarily conducted with the assumption of fraud or misconduct. Forensic Auditors are called only after the incidence has taken place and the incidence could be of fraud, default, misconduct or financial crime. In order to express the opinion on the incidence, sufficient evidences are required to be built in order to establish the wrongdoings. The primary purpose is evidence collection to establish a possible misappropriation, misstatement or a fraud and to identify the culprit. In addition to establishing the modus-operandi, forensic auditors are also required to quantify the damages and present the papers in the court of laws and provide the expert testimony.
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