FAIS 320 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Once a forensic engagement is accepted and planned, the next ICAI standards govern the work itself: how evidence is gathered and kept, how procedures and interviews are run, how the work is reviewed, how testimony is given and how the report is written. This article walks through them paragraph by paragraph for finance heads who will be interviewed or will receive the report, and for accountants who may be asked to supply records.
This article is from the ICAI Compendium of Forensic Accounting and Investigation Standards (as on September 2025); mandatory for engagements conducted on or after 1 July 2023. ICAI may revise the standards, so check the current text on icai.org.
Evidence must come from reliable sources, be relevant and be admissible before a competent authority, and its chain of custody must be documented (FAIS 320). Interviews are planned, confidential and carried out without inducement, threat or promise (FAIS 340). The report states facts, assumptions and limitations and must not pass judgement on guilt or innocence (FAIS 510, paragraph 3.7). FAIS 430, on loans or borrowings, is outside this article.
FAIS 320: evidence and documentation
Paragraph 3.1 requires evidence from reliable sources, relevant to the objectives and admissible before a competent authority, supporting the findings and allowing reasonable conclusions. Admissibility is a matter for the law of evidence, which is not explained here; where it matters, take advice through legal consultation. Paragraph 3.2 requires enough documentation to show how evidence was gathered, reviewed, recorded and stored, with its chain of custody, and requires digital documents to be reproducible as hard copy. Paragraph 3.3 keeps ownership and custody of documents with the Professional, and where work is given to a third party a full copy of the documents is obtained.
The explanatory comments add practical points. Reliability depends on source, type and completeness, and oral evidence is reliable only when written down as statements (paragraph 4.1). Where reliability is doubtful, the Professional considers corroborating evidence or extended procedures. The working file records procedures, hypotheses tested, information relied on, chain of custody, meeting minutes, witness statements, analytical work and key correspondence, with references to the observations in the report (paragraph 4.3). Privilege is also considered, so that evidence is shared only with those authorised.
FAIS 330: work procedures
| Requirement | In practice | Paragraph |
|---|---|---|
| Procedures follow scope and objectives | Work programme drawn from the plan and preliminary analysis | 3.1, 4.1 |
| Evaluate tools and techniques | Data analysis, digital forensics, interviews | 3.2 |
| Attention to fraud indicators | Red flags from phase 1 are validated in a detailed phase 2 | 3.3, 4.2 |
| Test hypotheses | Prove or disprove; redesign under FAIS 140 where needed | 3.4, 4.3 |
| Adjust methodology | Bring in experts if new facts demand it | 3.5, 4.4 |
| Document and communicate | Record outcome of each procedure and limitations; report progress to stakeholders | 3.6, 3.7 |
Paragraph 4.3 admits an honest limit: sometimes evidence has been destroyed or a source is not available, and a hypothesis can be neither proved nor disproved. The report says so rather than closing the gap by inference. For data work and digital evidence see our article on data analysis and digital evidence in forensic work.
FAIS 340: interviews
Interviews follow applicable laws and the standards after due preparation (paragraph 3.1). The interviewer develops a methodology (paragraph 3.2), keeps the details and outcome confidential (paragraph 3.3) and stays within the defined scope; a necessary interview that was excluded from scope is mentioned in the report (paragraph 3.4). Paragraph 4.2 lists the essential steps: a clear purpose, key themes or hypotheses, relevance to the objectives, an independent and impartial interviewer, senior representatives present where possible, a woman present or accompanying when the interviewee is a woman, and evidence collected without inducement, threat or promise. Paragraph 5.1 requires the content and outcome of each interview to be documented for later reference and legal proceedings.
FAIS 350: review and supervision
The extent of review is planned by judgement considering the assignment's nature, complexity, digitisation, laws, agency involvement, team competence and time (paragraphs 3.1, 4.1). The Professional oversees that activities match the plan (paragraph 3.2), reviews the plan itself during the work (paragraph 3.3), has the supervisor review the work procedures and working papers (paragraph 3.4), and holds consultations with experienced team members or experts on matters that need them (paragraph 3.5).
FAIS 360: testifying before a competent authority
This applies when the Professional gives testimony. Key duties from paragraph 3: be independent and have no conflict of interest (3.1); where there is a conflict, owe the paramount duty to the competent authority and not to the client, even if appointed by the party being investigated (3.2); confine testimony to facts and evidence gathered and avoid presumption (3.3); to be impartial, be involved throughout, lead the exercise, supervise the team and take part in finalising the report (3.4); and follow the statutory provisions for deposition (3.5). The explanatory comments say compensation must not depend on the outcome of the proceedings (paragraph 4.1) and that testimony must not be advocacy (paragraph 4.2).
FAIS 510: reporting results
Paragraph 3.1 asks for a written report that is precise and unambiguous, addressed to the primary stakeholders and shared with others only if required or permissible (3.2). No fixed form is prescribed, but the report includes the purpose, extent and scope of the work, limitations, assumptions and disclaimers, the facts and evidence gathered and the conclusions (3.3). If the form is set by stakeholders or by law, the Professional follows that (3.4). Where the mandate requires findings to be discussed with the subject party before finalisation, a summary of the responses goes in the report (3.5). Key assumptions and limitations are highlighted (3.6). Paragraph 3.7 says the report shall not express an opinion or pass judgement on guilt or innocence, because culpability is decided in an internal disciplinary process or a judicial process. If the work cannot be completed, a status report explains why (3.8), and the report is issued within a reasonable time under the engagement terms (3.9). A copy to other stakeholders needs the primary stakeholders' prior approval (paragraph 4.2).
FAIS 610: quality control
The Professional sets up a quality control system covering all stages (paragraph 3.1), staffs assignments with suitably experienced people and keeps a competency development plan (3.2), communicates the system to staff and experts (3.3), has a review before the report is issued (3.4) and monitors CPE, with at least five annual hours in forensic subjects for those doing FAI work (3.5). Our article on the FAIS framework places these among the other standards, and the standards for planning and acceptance are in the FAIS 210 to 310 article.
Illustrative example
Illustrative: in the Meridian Polymers matter, the accountant interviews the accounts clerk who booked three advances. The questions are planned around the advance hypothesis, an experienced partner attends, no promise of leniency is made and minutes are written the same day. Bank statements are obtained directly from the bank, hashed copies of email extracts are logged with who held them and when, and a third-party data specialist hands over a full copy of its working files. The draft report goes to the clerk's director for explanation; his written response is summarised in the report. The report lists the advances, the trail of funds, the assumptions about two missing vouchers and the limitation that one account was closed. It does not say anyone is guilty. A partner not on the team reviews it before issue.
Common lapses
- Oral explanations never converted into signed or recorded statements.
- Evidence copied into shared folders with no record of who handled it.
- A report that uses words such as "fraudster" or "culprit".
- Giving the subject party no chance to respond when the mandate requires it.
- Fees tied to the outcome of a case in which the Professional will testify.
For statutory auditors, documentation duties sit under SA 230; see our SA 230 guide.
Need help with a forensic report or an evidence review?
If you are preparing records for an investigation or need a clear view of what a report should and should not say, we can talk through the position under legal consultation before you respond to any notice.
Key takeaways
- Keep a chain of custody for every item of evidence and reproduce digital records in a form suitable for a competent authority (FAIS 320, paragraph 3.2).
- Record each interview and run it without inducement, threat or promise (FAIS 340).
- Where a hypothesis cannot be proved or disproved for lack of evidence, say so (FAIS 330, paragraph 4.3).
- A testifying professional's paramount duty is to the competent authority (FAIS 360, paragraph 3.2).
- The report must not express an opinion on guilt or innocence (FAIS 510, paragraph 3.7).
Read next
- Forensic Accounting and Investigation Standards: framework and basic principles
- FAIS 210 to 310: objectives, acceptance, experts, agencies and planning
- Data analysis and digital evidence in forensic work
- SA 230: audit documentation
Disclaimer: Based on the Standards on Auditing, the review, assurance and related services standards, the Compendium of Standards on Internal Audit (as on 1 October 2022) and the Compendium of Forensic Accounting and Investigation Standards (as on September 2025) issued by the Institute of Chartered Accountants of India, in the versions named in the article, as consulted on 4 October 2026. ICAI revises standards from time to time; check the current text and effective dates on icai.org and the Companies Act provisions referred to. This article is general information, not legal advice; check the official text before acting.