Investigating Fraud

Fraud is something that companies will always have to deal with. Having internal controls in place will give employees the opportunity to make anonymous tip so they will be more likely to let someone know what may be taking place inside a company. Of course not all companies will investigate the tips but some will and that will lead to the investigation that I will be explaining today.

Given the situation discuss some of the options the company has for handling this situation.

As the director of the auditing department, Donald would have to tell the company's executives and employees that there has been a case of embezzlement within the company. Since there is a cause for suspicion the company policy is to investigate. This way the CEO and CFO can claim its just policy when the plant controller comes asking why there is an investigation going on. The CEO and CFO need to tell all employees to cooperate.

The next step would be to hire an outside investigator who investigates fraud. Hiring someone from the outside will take the pressure off the executives. Now an investigation can begin with no one knowing who the guilty party is until it is time.

If you decide to go with doing an inside investigation you will need to have the auditors come back now instead of later and more than likely pay more. You could also decide to question the plant controller yourself and see if he will come clean with you. I do not recommend this. Most times this will not turn out the way you need it too.

Assuming you decide to investigate these allegations, describe the investigation steps.

1) Obtain evidence and statements. This would entail getting statements from all the employees who may or may not know about the fraud. You would collect all the statements and file tem for later use. Always use two people for an interview, one for asking questions and the other for taking notes (Investigating).

2) The next step you will write out all the reports. You will need to make sure everything is correct.

3) The third step is to do in depth interviews with the closest people you suspect. If you need to, make sure you involve the law enforcement. Should the main suspect which to have a lawyer present, make sure he is allowed to have one?

4) The fourth step would be to tell the appropriate law enforcement if you haven't already done so. Give all evidence to the police so they would be able to take over from then on. You may need to be called to testify at a later time.

5) The last step would be to suggest improvements on the way the audits should be done so this does not happen again.

In preparation for the interviews, note the order of the witnesses who would be interviewed and how you would plan, conduct, and document your interviews.

During the interview make