Corporate Fraud and Internal Control Workbook: A Framework for Prevention

Chapter Nine

Investigating Fraud

THE INVESTIGATION OF ALLEGATIONS OF WRONGDOING can prove a difficult and daunting task, requiring objectivity, determination, and attention to detail. The investigation's primary objective is to establish the facts, in such a way that alleged fraud may be proven or disproven, and restitution and punishment may be sought where appropriate.

QUESTIONS: FILL IN THE BLANKS

Refer to Chapter 9 in Corporate Fraud and Internal Control: A Framework for Prevention.

1. Fraud investigation is typically a ___________ function triggered by the internal or external recognition of a red flag indicating the potential presence of fraudulent activity.

2. The Red Flags rule requires organizations falling under the authority of financial agencies to implement a written ___________ specifically designed to detect the red flags of identity theft in order to spot suspicious patterns when they arise.

3. A single red flag is not proof that a fraud has taken place. Where ___________ of such indicators are found, the manager should be more alert for irregularities.

4. In many cases, investigation of fraud reveals an underlying failure of management ___________ and poor ___________ of company policies and procedures.

5. Reward structures based on ___________ , dictatorial management in a power-driven environment, and constant ___________ are breeding grounds for fraud.

6.