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Do You Have a Fraud Investigation Policy?

October 10, 2019 by OSYB Staff

What happens when you discover that fraud has been uncovered in your business? Once fraud has been discovered immediate attention is required and an investigation should commence with the right team. Fraud Files shares a comprehensive guideline on what to do:

  • Implement your fraud investigation policy which should be included in company guidelines and should cover:
    • when an actual investigation is warranted
    • parameters of the investigation
    • create a uniformity to the process to ensure equal treatment of similar offenses
  • If you don’t have a fraud investigation policy, here are some points to consider:
    • create a list of red flags that trigger a management investigation such as a credible tip or unusual accounting entries
    • multiple management levels should be assigned to evaluate the red flags to ensure that all levels of employees can be investigated even the CFO or CEO.
    • should include action triggers and criteria for when a high-level examination should commence
  • Establish an Investigative Team:
    • put together a team of qualified and relevant professionals that could include outside consultants
    • team should be led by a fraud examiner or forensic accountant, typically an outside consultant to bolster the independence of the examination
    • legal counsel’s role is to dictate the direction of the investigation to the team leader who plans and performs the process
    • representative from management and a board member should also be involved
    • hiring expert outside consultants when needs arise

Now that you have the policy and team in place, you should be able to manage the crisis, if it were to ever occur.


For full article: Conducting Corporate Fraud Investigations
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