Objective and Purpose of Financial Statement Audit and Forensic Audit

Though International Standards on Auditing (ISAs), issued by International Auditing and Assurance Standards Board (IAASB), limit auditors without any categorical requirements on fraud detection in financial statements, users of financial statements believe that auditors are able to identify by performing audit procedures the risk of misstatement formed by fraud. Audit procedures are designed to detect only material misstatements and thus auditors might not be able to detect all fraud even if they apply reasonable procedures that react on arising of fraud. Nowadays, there are various techniques that could be used for fraud detection. One of the suggestions is forensic audit using specific procedures, methods and techniques. The main objective of this article is to summarize the detection of fraudulent activities and prevention from their happening by audit of financial statements as well as forensic audit.