CHAPTER 2Legal Issues Pertaining to Fraud*

A variety of legal issues may arise during the course of a fraud investigation. This chapter covers some of the basic principles relating to evidence, legal privileges, privacy, and employee rights. However, it is important to keep in mind that the legal systems in different countries or jurisdictions can vary dramatically. As a result, fraud examiners should consult with counsel regarding relevant local laws and regulations. More information about the laws and practices of specific countries is contained in Part Two of this handbook.


At a very basic level, legal systems can be divided into several categories.

Religious and Secular Systems

Religious systems derive their laws from interpretations of religious texts and treat them as divine mandates. However, today few countries rely exclusively on religious law. Instead, it is often used in conjunction with secular law. For example, some countries that use religious law restrict its application to issues such as divorce, inheritance, and child custody, while using secular law to govern criminal and commercial law.

The majority of legal systems are secular systems. This means that the laws are not based on any particular religion. Instead, they are designed and implemented by the relevant governmental authorities.

Common Law and Civil Law Systems

Most legal systems also fall under the umbrella of one of two legal “families” – common law systems and civil ...

Get International Fraud Handbook now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.