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Planning a Fraud Investigation

Internal corporate investigations are a big deal – not only for the company, but for the individual that is being investigated as well. There is no doubt that fraud is a serious concern for any company, and companies should keep a keen eye out for these activities. Once the warning signs or smoking gun have been detected, entering a full scale corporate investigation means hundreds of man hours, potentially uncomfortable situations and a whole lot of money thrown into a problem that already could have cost them thousands. When planning a fraud investigation, there are a few things that need to be taken into consideration throughout the process in order to yield the best results;

Identify Potential Questions

What exactly is the purpose of your fraud investigation? What is it that you already know in the first place that led to the accusations or suspicions? What needs to be found for the investigation to be successful? Many of the questions are going to be shaped by the laws that govern a particular organization.

When it comes to fraud, it is important to determine what questions need to be answered by a potential investigation. To start – when did the potential fraud take place? Was there one or more individual that may have been a part of the fraudulent actions? Who else might have known about them? What actions need to be taken if the fraud is confirmed?

These are all solid questions that should be taken into account from the beginning of the investigation so that you can be sure that the investigation has a ‘goal’ that it is working toward achieving – and that goal is seeing that all of its initial questions are answered during the investigation.

Understanding Information

Any investigation is almost surely going to have a large amount of data and information to sift through when looking for potentially fraudulent actions. For this reason, a team needs to be assembled that has a solid knowledge of that data and how to appropriately read into that data. The type of data that a company may be sifting through during a fraud investigation may include but will not be limited to instant messages, e-mail, telephone records, financial information, surveillance tapes, and employee records. This will likely require individuals that are located in several departments throughout the company.

Assembling the Team

Once you know the different aspects of the company and data sets that you will b working through, then you can begin to assemble a team for the investigation. Using your own resources, and especially those that are familiar with the data that will be present throughout the investigation. Even if the company is going with outside counsel, there will still be a lot of coordination between your own resources and those from the third-party investigation unit.

Assembling the team also requires that the company take a look at outside sources that they may need to use. These individuals will include forensics, background, and account experts that can help the company to properly identify the fraudulent activities.

Gathering Evidence

A large portion of any corporate fraud investigation is going to be the gathering and presenting of evidence. Keep in mind that this evidence may need to be used in court, and should be collected while keeping all current regulations in mind.

Before interviewing witnesses, it is important that the entire team has a firm understanding of the situation. Evidence should be gathered before interviews are conducted so that the team has a solid understanding of what happened, and can better frame their interview questions.

Throughout the process it is also important to realise that getting to the bottom of a fraud investigation can be quite difficult. Many of the necessary documents might have been altered or destroyed to further the fraud, and in these circumstances it is important that the investigative team is able to act quickly and silently throughout the early stages of the process.

Updating Interested Parties

From the very beginning, the investigation should also aim to ensure that those parties that have a stake in the investigation are informed of the progress throughout. These individuals may include superiors, executives, staffing, board of directors, or various committees. It is important that the proper information is correctly disseminated throughout the whole of the investigation.

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