During the year the internal auditor of Mulligan Co discovered several discrepan

During the year the internal auditor of Mulligan Co discovered several discrepancies in the inventory records. In a

statement made to the board of directors, the internal auditor said:

‘I think that someone is taking items from the warehouse. A physical inventory count is performed every three months,

and it has become apparent that about 200 boxes of flat-packed chairs and tables are disappearing from the

warehouse every month. We should get someone to investigate what has happened and quantify the value of the

loss.’

Required:

(c) Define ‘forensic accounting’ and explain its relevance to the statement made by the internal auditor.

(5 marks)

(c) Forensic accounting is where an assurance provider investigates a specific issue, often with a legal consequence, such as asuspected fraud. Specifically it is the process of gathering, analysing and reporting on data for the purpose of finding factsan