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An Auditor looks for acts of omission; forensic looks for acts of commission. Auditor looks for overstated assets and understated liabilities; forensic looks for understated assets and overstated liabilities. If we use an inventory as an example, creative accounting will cause an inventory value higher than it should ordinarily be but theft will cause an inventory value lower than it should be. I think Forensic Auditing pays more because it increases profit directly.
An auditor is checking to see if the accounts and files conform to a specific set of specifications whereas a forensic accountant is investigating to see if they can find something wrong.
Auditor look after routine accounts and copliance wwith Accounting Standards Forensic accountant look for fraud committed
An audit is a set of tests and procedures carried out according to generally accepted auditing standards. Those standards require that the auditors plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
Forensic accounting is typically used in the course of an investigation. The goal of which would be to detect fraud and provide evidence which can be used in a court of law. The proceedings are not always criminal but often times civil and also require a valuation of assets (as in a divorce case).
In general, auditors ensure that company is maintaining accurate and honest accounting records and fairly presented financial statements. Threre are external (independent) auditors and internal (employed) auditors.
A forensic accountant usually perform activities like to analyze, investigate and report financial/business related issues.
