Investment Risk Management: The Forensic Audit Perspective

The risk of investing is the uncertainty involved in investing money in activities, ventures or other ventures, since it is not certain that the desired return will be obtained. It is essential to recognize and evaluate potential risks to manage investment risk and have an appropriate investment strategy, for this a tool used is forensic auditing, which is essential to detect and stop fraud activities and at the same time promote ethics and transparency in companies. With the current complexity of markets and companies to address financial risks, forensic auditing is an instrument that seeks to guarantee the protection of investors' assets and the detection of financial fraud. Methods: A qualitative approach was used with the use of documentary review, where case studies are presented on how forensic auditing allowed the identification of irregularities and financial frauds in companies; Results: In its Annual Report on the Nation, the Association of Certified Fraud Examiners [ACFE] identifies three types of fraud: financial statement fraud, improper disposition of assets, and corruption. Mexico, Argentina, Brazil, and Colombia are the most representative countries in this study, since the 2022 report analyzes 95 cases from 23 countries in the Latin American and Caribbean region, highlighting the cases of Efecty, Pecsanova, Interbolsa, Air conditioning companies in Guangzhou among others, whose results show financial fraud and irregularities in documents; (4) Conclusions: The cases studied show that with the application of forensic auditing, financial delinquents and the requirements to implement internal controls in organizations were identified to improve data-based investment decision-making.