Investigation Audit & Forensic Audit in Delhi | Fraud Investigation by CAs

In a Nutshell: When Something Is Wrong and You Need to Know What, Who and How Much

An investigation audit (often called a forensic audit) starts from a specific suspicion and works to establish the facts — what happened, how, over what period, who was involved and what it cost — in a form that can support disciplinary action, insurance claims, recovery or legal proceedings. Startup Advisory handles these engagements confidentially, with a small CA team and a tight circle of disclosure.

Typical triggers: unexplained cash or stock shortages, vendor kickbacks, fictitious employees or suppliers, revenue diversion, related-party leakage, partner or shareholder disputes, whistle-blower complaints.
Standards: work aligned to ICAI’s Forensic Accounting and Investigation Standards (FAIS), mandatory for members on such engagements from 1 July 2023.
Methods: evidence preservation, full-population data analytics, document examination, background checks and structured interviews.
Output: a factual investigation report with quantified loss, supported by an indexed evidence file.
Confidentiality: engagement through the board, promoter or counsel; findings shared only with the people you name.
Provider: Startup Advisory, CA firm in Saket, New Delhi 110030. Call 9311972982.

Reviewed by CA Neeraj Rohilla, FCA — Chartered Accountant, Startup Advisory, Saket, New Delhi.

The First 48 Hours Decide How Much You Can Prove

When an owner first suspects fraud, the instinct is to confront the person, pull the files or start asking questions. Each of those can destroy the evidence you will later need. An investigation audit begins by securing what exists — system data, email, documents, bank records — and only then asking questions, in an order planned to get honest answers.

What we investigate

Employee fraud: cash skimming, expense and reimbursement fraud, payroll padding and ghost employees, misuse of company cards.
Procurement and vendor fraud: fictitious or related vendors, kickbacks, bid rigging, inflated or duplicate invoices, short supplies passed as full.
Revenue and stock diversion: sales routed to parallel entities, unrecorded cash sales, stock leakage from warehouses or stores.
Financial statement manipulation: revenue inflation, hidden liabilities, round-tripping, misstated inventory.
Disputes: partner, shareholder and family-business disputes over profit share, fund diversion or related-party dealings.
Whistle-blower complaints: independent investigation of complaints received through a vigil mechanism.

How an investigation runs

Step 1 — Mandate and scope: a written engagement through the board, promoter or the company’s lawyers, with the allegation, period and limits defined.
Step 2 — Evidence preservation: forensic copies of accounting data, mailboxes and devices where authorised; physical documents secured; chain of custody recorded.
Step 3 — Analysis: full-population analytics on ledgers, bank statements and ERP logs — duplicate payments, round-sum entries, vendor-employee matches, weekend postings, Benford-style tests.
Step 4 — Fieldwork and interviews: document examination, third-party confirmations, background checks on counterparties, and structured interviews in a planned sequence.
Step 5 — Report: facts found, the method used, quantified loss, control failures that allowed it, and recommendations — without conclusions on guilt, which are for the appropriate forum.

Where an investigation sits in the law

Under Section 143(12) of the Companies Act, 2013, a company’s statutory auditor who has reason to believe an offence of fraud is being committed against the company by its officers or employees must report it — to the Central Government where the amount is ₹1 crore or more, and to the audit committee or board below that. Lenders may also commission a forensic audit on a borrower account. A management-commissioned investigation is separate from both: it is your own fact-finding, done before others do it for you.

We work alongside your legal counsel where proceedings are likely, and we do not give legal opinions. Where the issue is a weakness rather than a known fraud, a preventive internal audit or concurrent audit of payments is the better starting point.

Related Audit & Assurance Services

Internal Audit →Risk-based internal audit under Section 138 — process reviews, control testing and quarterly reports to the board or audit committee.

Concurrent Audit →Real-time audit of transactions for banks under RBI’s concurrent audit guidelines, and for businesses with high-volume payments.

Financial Due Diligence →Buy-side and sell-side financial due diligence for acquisitions, mergers, JVs and lenders — quality of earnings, net debt, working capital.

Store Audit →Stores and inventory controls — receipts, issues, consumption, min-max levels, slow-moving stock and leakage.

See all audit & assurance services

Frequently Asked Questions

An investigation audit is a focused examination carried out because a specific irregularity is suspected. Unlike a routine audit, it starts from an allegation or red flag and aims to establish the facts, the people involved, the method and the financial loss, with evidence that can support further action.

The terms are often used interchangeably. Forensic usually signals that the work is done to a standard suitable for legal or regulatory proceedings, with evidence preservation and chain of custody. ICAI’s Forensic Accounting and Investigation Standards apply to members undertaking such engagements.

Do not confront the person, do not delete or move records, and limit who knows. Secure system access if you can do so quietly, note what you have observed, and speak to an investigator and your lawyer before taking further steps.

The report sets out the facts established and the evidence for them, including who did what where the evidence shows it. It does not pronounce guilt; that is for an employer’s disciplinary process, an insurer, a court or a regulator to decide on the evidence.

A contained issue, such as a single vendor or one employee’s expenses, can take two to four weeks. Broader investigations covering several years or entities take longer. The scope agreed at the start drives the timeline.

Very. We take the mandate through the board, promoter or legal counsel, limit the team to the people who need to know, and share findings only with the persons named in the engagement letter. Call 9311972982 to speak to a partner directly.

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