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What Happens When Fraud is Uncovered?

October 15, 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 a fraud investigation (see previous post) should commence with the right team. Fraud Files shares a comprehensive guideline on how a fraud investigation should be run:


  • A fraud investigation is document-intensive therefore organized document management procedures are vital:
    • documents should be filed chronologically and sorted if possible by witnesses or transactions
    • use of a database or spreadsheet to track documents and to enhance the locatability of documents is important
    • every document should be marked with date received, a brief description and the parties involved
    • creating a key document file which holds copies of often used or referred to documents for easy access is key, as it also keeps the originals in a safe place.

Investigation can begin after the determination has been made that a fraud investigation is needed. Here are some general next steps:

  • commence with the gathering of the evidence of fraud
  • gathering of testimony through interviews or interrogation, which can include physical evidence, personal observation of fraud investigators, etc.
  • other documents that may be collected and studied can include bank statements, cancelled checks, accounting system report, etc.
  • indirectly relevant information such as prior audit and investigation files, personnel records, security logs, etc. may also be collected
  • thorough and detailed examination of documentation
  • final report to be presented to management team
  • determinations to be made by management team and fraud investigators as to what the next steps are to rectify the fraud, which could include system process changes all the way up to informing legal and law enforcement agencies

Fraud investigations can be extremely serious and can have catastrophic consequences for your business if mishandled. It is important to get the investigation done promptly and that it be lead by competent professionals and supported by management and employees.


For full article: Conducting Corporate Fraud Investigations
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