🔍 What Triggers a Forensic Audit in Construction?

If your company is under scrutiny, don’t hide. Get organized, get transparent, and get help from someone who knows how to navigate the process.

I’ve worked with contractors who panicked when they saw “forensic audit” in an email subject line. But when we took a methodical approach—documented everything, told the truth, and cooperated—the result wasn’t litigation… it was clarity.

Sometimes a forensic audit exposes fraud. Other times, it just reveals sloppy bookkeeping. Either way, it’s a wake-up call—and a chance to build something stronger.

🧾 Under Audit? Here’s How to Survive a Forensic Deep Dive

A contractor’s guide to surviving scrutiny—and protecting your business

You just got the call: you're being audited. Not just any audit—a forensic audit. That means someone thinks something is wrong, and they're not just checking the math… they’re following the money.

As a forensic construction accountant, I’ve seen businesses implode not because they did something criminal—but because they were disorganized, panicked, or dishonest when the audit began.

Here’s how to survive it—and come out stronger.

🔍 What Triggers a Forensic Audit in Construction?

• Disputes over change orders or project billing
• Cash flow that doesn’t align with reported profits
• Ownership disputes or partner buyouts
• Suspected misappropriation or fraud
• Due diligence before a sale or merger

In most cases, the audit is driven by red flags—and a forensic accountant is hired to investigate, not advise.

🧯 What NOT to Do When You’re Being Audited

1. ❌ Don’t “clean up” your records mid-audit Auditors can trace changes—and it creates suspicion.
2. ❌ Don’t delete emails or files Missing records are more suspicious than messy ones.
3. ❌ Don’t withhold information It delays the audit and erodes trust. If it’s relevant, share it.
4. ❌ Don’t assume you can talk your way out We follow data, not charm.

✅ What You SHOULD Do Immediately

1. ✔️ Lock down all relevant documents Job costing reports, change orders, contracts, payment apps, and communications.
2. ✔️ Assign a single point of contact This avoids crossed wires and inconsistent stories.
3. ✔️ Stay transparent If there was a mistake, admit it. Forensic audits uncover intent—honest errors don’t carry the same weight as deception.
4. ✔️ Get your accountant involved early Your internal or outsourced accountant can help you organize and respond more effectively.