What is the difference between a fraud investigation and an audit?

An audit is a systematic, independent examination of financial statements conducted to provide reasonable assurance that the statements are free from material misstatement, whether due to error or fraud. Audits are not specifically designed to detect fraud, and while auditors are required to consider fraud risk, they are not forensic investigators. A fraud investigation, by contrast, is a targeted, evidence-gathering inquiry designed specifically to determine whether fraud has occurred, how it was perpetrated, who was responsible, and what was lost. Fraud investigations use forensic methodologies, legal evidentiary standards, and investigative techniques that go well beyond standard audit procedures. If your audit has identified a red flag or you have independent concerns about fraud, Yeo & Yeo’s forensic team can conduct a dedicated fraud investigation that goes deeper than an audit can or should.