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Forensic audit, distinct from statutory audit, is:
AA focused investigation engagement to detect fraud or financial misconduct, with detailed evidence-gathering for potential legal use
BMandatory annual exercise
CSame as tax audit
DOnly for listed entities
Answer & Solution
Correct answer: B. Mandatory annual exercise
1. Forensic audit is investigation-style, often court-evidence-ready.
2. Distinct from statutory audit which gives reasonable assurance on FS.
3. Not mandatory; commissioned on need (regulator, court, board, lender).
_Source: ICAI BoS CA Final Paper 3, Ch 6 "Standards on Auditing and Professional Ethics"_
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