Managing Fraud Risk: A Practical Guide for Directors and Managers

Fraud Investigation – Best Practices

Introduction

This section looks at the framework of investigations and establishes the essential ground rules for success. The circumstances of each individual fraud case will be different so that the investigatory tactics that are likely to produce the best results will vary from case to case. However, there are a number of key components that are likely to feature in most investigation situations: handling the initial allegations; setting the overall objectives; personnel and reporting lines; using covert techniques; evidence handling; rules for interviewing under conditions of stress; dealing with the police and the litigation process; quantifying the claim and keeping the insurers informed; and communication issues, both internal and external. These areas are not mutually exclusive and there will be many cross-over points in practice, as the case study above clearly demonstrates. For the purposes of clarity and efficiency, however, each one is addressed in turn below.

Before we look at the detail, it is worth re-stating the two overarching principles behind fraud investigations: firstly, they should be carried out by experts in this field; and secondly they require that a forensic approach is taken from the outset in order to provide the best chances of success. Directors and managers should not themselves become involved in the detail of fraud investigations. Senior managers do have an important role to play, however. They should understand ...