You’ve spotted something that doesn’t look right in your financials—or maybe your board or lender is asking for an independent review. But when you start looking for help, terms like audit, review, and forensic examination can sound confusingly similar. Which one do you actually need? 

Each serves a different purpose: audits and reviews provide assurance to outside parties that your financials are reliable, while forensic examinations dig into specific questions like suspected fraud or contract disputes. Understanding the difference can save time, money, and frustration—and ensure you get the right level of insight for your situation. 

This guide breaks down what each service really does, when to use it, and what you can expect from the process. 

In short: 

• An audit gives outside stakeholders confidence that your financial statements are fairly presented. 

• A review offers limited assurance at lower cost when an audit isn’t required. 

• A forensic examination investigates a specific issue (e.g., suspected fraud, embezzlement, or a contract dispute) and develops evidence that can be used in negotiations or court. 

The Big Difference: Assurance vs. Investigation 

Audits and reviews are “assurance” services. The goal is to evaluate the financial statements as a whole and report a level of assurance to third parties such as lenders, investors, or boards. (Audits provide reasonable assurance; reviews provide limited assurance.) These services are often requested for financing applications, insurance, or transactions because they help the other side trust the numbers. 
 
A forensic examination is different. It’s not about broadly reviewing financial statements. It’s about answering a targeted question: Did something improper happen? How? Who was involved? How much? Forensic work follows the evidence where it leads, preserves that evidence, and documents findings in a way that can support legal or regulatory processes under the AICPA’s Statement on Standards for Forensic Services (SSFS No. 1).  

What Each Service Looks Like in Practice 

Audit (Assurance—Broad Scope) 

• Use it when: banks, investors, or your board require the highest level of confidence in your financial statements. 
• What we do: risk‑based testing of transactions and controls, confirmations with third parties, and evaluation of accounting policies. 
• Output: an auditor’s opinion in report form on whether the financial statements are fairly presented in accordance with specific accounting standards (often Generally Accepted Accounting Principles “GAAP”). 

Review (Assurance—Lighter Touch) 

• Use it when: you don’t need a full audit but stakeholders still want comfort. 
• What we do: inquiries and analytical procedures—no detailed testing or confirmations. 
• Output: a review report stating we’re not aware of any material modifications needed. 

Forensic Examination (Investigation—Focused and Evidence‑Driven) 

• Use it when: there’s a red flag, allegation, dispute, or insurance claim, and you need facts and quantification. 
• What we do: targeted data analytics, transaction tracing, structured interviews, and evidence preservation appropriate for legal forums. 
• Output: report findings (either in report, schedules, oral communication, or schedules) and, if needed, expert testimony, that help you decide next steps or support a claim or defense.  

Comparing Audits, Reviews, and Forensic Examinations 

Quick Decision Guide  

Choose an Audit if you need to: 

• Satisfy a bank/investor requirement or prep for a deal. 
• Demonstrate overall financial reporting quality to your board. 

Choose a Review if you need to:

• Provide limited assurance to outside parties at a lower cost than an audit. 
• Establish a baseline of trust in your numbers without full testing. 

Choose a Forensic Examination if you need to:

• Investigate suspected fraud, embezzlement, or irregularities. 
• Quantify losses or damages for disputes (e.g., post‑acquisition issues, lost profits). 
• Preserve and present evidence for a potential legal or regulatory matter  

Common Misconceptions—Cleared Up 

Audits find every fraud.

No. Audits are designed to provide reasonable assurance that the financial statements are fairly stated and free of material misstatements in accordance with GAAP or other accounting standards. Audits may detect issues, but they’re not designed to uncover all fraud, especially if it is immaterial to the financial statements. If you suspect wrongdoing, a forensic examination is the right tool. 

Forensic = Tougher Audit

Not exactly. Forensic work uses investigative methods and documentation practices aimed at admissibility and persuasion in a dispute setting—not issuing an audit opinion. They are tailored to specific issues and the scope is limited to certain areas of the financial statements, not the financial statements as a whole. 

We are sometimes asked by clients to perform a “forensic audit” and provide an opinion that no fraud is present. In addition to being a practically impossible task, this is not the purpose of a forensic examination. We often refer to this as a “boil the ocean” approach, which inevitably results in exorbitant fees and an unsatisfied client.  

We’ll do a review now and upgrade to forensic if needed.

If you already have a credible red flag, starting with a forensic scope usually saves time and protects evidence integrity. This is analogous to suspecting you have a broken leg and going to the doctor for a routine check-up instead of an x-ray. 

How Our Team Works with You 

We start with a brief scoping call to confirm your goal, then recommend the lowest‑cost, right‑sized service to answer your question—assurance when you need confidence, forensic when you need facts. If a dispute emerges, our forensic findings can support counsel and, where necessary, expert testimony is provided to aid you in your case. 

If you are looking for support in identifying whether your business needs an audit, review or fraud examination, reach out to one of our advisors below.