Forensic audits and statutory audits are both used to check the validity of financial statements. In light of this, present research is conducted to study and compare the impact of forensic auditing techniques and statutory auditing techniques' in effectiveness of fraud detection along with the financial advisory system. To meet the research objective, a questionnaire was framed for all three independent variables, that is forensic auditing techniques, statutory audit techniques, and financial advisory system and one dependent variable that is fraud detection. Out of 3, forensic audit techniques was found to be more relevant then statutory auditing techniques and financial advisory system for the purpose of fraud detection. The results of the research have necessary managerial and social implications, which will contribute by providing the road map for developing a concrete mechanism for fraud detection.
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The distinction between empowerment and oppression in the conduct of forensic and statutory audits for the purpose of fraud detection is a crucial area to fully understand the different methods employed as well as the effectiveness in the detection of corrupt acts (Pitchayatheeranart & Phornlaphatrachakorn, 2023). Forensic accounting is usually a detailed inspection and analysis of the financial standing of a business after it has been suspected that things are not, in fact, as they seem and this is often done by trying to see if there are any anomalies or patterns which can tell that fraud has taken place, using specialized tools and techniques (Malik & Al-Sartawi, 2023). It is dubbed to monitoring, collecting and using of evidence that may potentially result in legal process and is perceived to be proactive and investigative (Ismail et al., 2023). Distinctions between statutory auditing and the detection of intentional fraud detection, however, tend to center not on regulatory compliance (Qazaawi et al., 2023). Either statutory assurance or broadly, financial statements & it particularly fraud may not be uncovered unless some specific red flag are identified (Alzoubi, 2023). Through the comparison of these two techniques, this research will provide significant outcomes regarding their advantages and disadvantages, in order to determine the best approach for auditors and organizations in operation to choose their precise assemblage of tools against fraud and its networks (Mejeran & Al-Sartawi, 2024).
In forensic auditing, its strength lies in its involved functions which include checking, conducting and revealing fraudulent activities (Al-Hazaima et al., 2023). In contrast with the regular audits which number one mission is to provide the evidence of the compliance and conduct a general statement of the financial records, forensic audits zero in on uncovering the fraud schemes, illegal activity and misconduct (W. A. Alaaris & Al-Sartawi, 2024; Kayed & Al-Sartawi, 2024; Nurhajati et al., 2023). This is the far-reaching method, which shows the detailed analysis and investigation of the financial records, the interviews of people involved, and the use of forensic techniques, which is the overall process of gathering and examining the evidence (Fico & Walsh, 2023; Ozili, 2023). Another reason why forensic audit is so important is that it is often capable of identifying and exposing fraud that had been previously undetected, thus allowing organizations to avoid financial and reputational damage. Finance and law intercept at forensic audits (Alrawashedh, 2023). If the findings are evidences for legal proceedings, they become an essential tool in prosecution and punishment of fraud offenders. Fundamentally, what is the essence of forensic auditing is in that it provides a session that is comprehensive and thorough, extending the demerits of traditional audits, and therefore assisting organizations to safeguard their publics and endeavor in the operations freely while maintaining integrity.