Glossary · Reading the business
Forensic audit
In short
A detailed examination of financial records to uncover discrepancies, fraud, or hidden financial issues. It goes beyond a standard audit, looking for specific evidence of wrongdoing or misrepresentation.
What it means in a deal
If due diligence raises serious red flags about the seller's financial representations, a forensic audit might be necessary. This deep dive can uncover undisclosed liabilities, embezzlement, or manipulated financials. It's a costly step but crucial if you suspect foul play.
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Common questions about Forensic audit
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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