what is sebi forensic audit?



A forensic audit is an investigation that is conducted by a professional auditor to gather evidence of any financial fraud or misconduct. In the context of the securities market, a forensic audit is conducted by the Securities and Exchange Board of India (SEBI) to investigate any suspicions of fraud or misconduct by companies or individuals that are involved in the securities market.

SEBI may conduct a forensic audit to investigate any suspicious trading activity or to examine the financial records of a company or individual that is suspected of fraud or misconduct. The audit is conducted in accordance with the laws and regulations that govern the securities market and is designed to uncover any evidence of illegal or unethical activity. The forensic audit may be conducted by SEBI's own internal team or by an external auditor appointed by SEBI.

The forensic audit typically includes:

An examination of the company's financial records, including financial statements, bank records, and other financial documents.


Interviewing employees, management, and other individuals who may have information relevant to the investigation.


Analyzing data and identifying patterns or anomalies that may indicate fraud or misconduct.


Identifying the source of any illegal or unethical activity and the individuals responsible for it


Preparing a report that summarizes the findings of the investigation and recommends any action that should be taken to address the issue.

The results of the forensic audit are used by SEBI to determine whether any action is needed to protect the interests of investors and to maintain the integrity of the securities market.

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