Referral Pathway
Definition
The institutional or personal channel through which the trigger reaches the forensic auditor. Pathways include the audit committee, internal audit, external auditor, a regulatory body, or law enforcement. The pathway determines reporting lines, independence requirements, and evidence-sharing obligations.
- Possible channels
- Audit committee, internal audit, external auditor, regulator, law enforcement
- Determines
- Reporting lines, independence requirements, evidence-sharing obligations
- Field
- Forensic accounting engagement initiation
Common questions
Why does the referral pathway affect how independent the forensic auditor must be?+
A referral from the audit committee or an external regulator generally carries stricter independence requirements than an internal referral, because the resulting report may be relied on by parties outside the organisation, so the auditor's engagement terms and disclosures are shaped by which channel the referral came through.
Does the referral pathway change what evidence the auditor is obliged to share?+
Yes, a regulator- or law-enforcement-originated referral typically comes with statutory disclosure obligations that an internally initiated review does not, so the auditor must confirm the pathway early to understand who is legally entitled to see the findings.
Related terms
- Audit Committee Referral
- A mandate from the board's audit committee to conduct a forensic investigation. Because the audit committee is independent of management, this pathway...
- Engagement Trigger
- The event, report, or observation that initiates a forensic audit engagement. Common triggers include whistleblower reports, regulatory referrals, audit anomalies, and management...
- Predication
- The reasonable basis that justifies opening a fraud examination. The ACFE holds that no examination should begin without adequate predication, meaning a...
- Regulatory Referral
- A direction from an external oversight body such as the US Securities and Exchange Commission, the UK Financial Conduct Authority, India's Serious...
- Whistleblower
- An individual, typically an employee or former employee, who reports suspected misconduct to an internal hotline, audit committee, regulator, or law enforcement...