Question

What are the steps in a fraud examination? Why is it important to follow these steps?

What are some of the guidelines related to the following:

Documentary Evidence

Electronic Evidence

Interviewing

Why is it important to follow these guidelines?

How may the internet and technology assist in a fraud examination?

Why is it important for an employer to have policies in regards to employees rights?

Answer 1

ANSWER:-    

• Fraud Examination:

Fraud examinations are conducted to determine if fraud has occurred and if so to gather evidence of the crime. Fraud is usually considered a white collar crime and the examination will involve surveillance and analysis of complicated financial records.

• Followings are the steps involved in a Fraud Examination:-

1. Analysing available data
2. Creating a hypothesis
3. Testing the hypothesis
4. Refining and amending the hypothesis

• Followings are guidelines relating to the:-

1. Documentary Evidence: The value of a fraud examination rests on the credibility of the evidence obtained. Evidence of fraud usually takes the form of documents or statements by witnesses; therefore, fraud examiners must know how to properly and legally obtain documentary evidence and witness statements.
2.                                        apply a framework of logic and inference to secure documentary evidence, identify relationships, prepare an investigative report and understand the role and nature of witness testimony.

1. Electronic Evidence:   In today’s world of increasing technologies, more and more information is created, stored, and disseminated electronically. Due to the sensitivity of digital evidence, the team should include a computer forensic expert if an investigation involves more than cursory analysis of electronic evidence. Moreover, with the majority of communication being conducted electronically, emails can be used as evidence in just about any case. Computer forensic experts can uncover a large amount of data that relates to the use of a computer, what is or has been stored on it, and the details about the computer’s users. Additionally, computer forensic experts might be able to recover evidence that a non-expert cannot. An expert can able to detect unauthorised access of Data saved electronically i.e. altered, deleted replaced etc.

1. Interviewing:   When interviewing the source, the interviewer should seek to determine if there is any reason to suspect the complainant’s credibility. Also, if there are any weaknesses in the complainant’s information, the interviewer should ask the complainant to explain what he expects the subject would say in defence of the allegations and ask the complainant to explain why such a response is not sufficient to dispose of the matter. Additionally, the interviewer should ask the source what he wants the organization to do about the complaint. Those responsible should interview key individuals for information about the suspicious conduct and the subject(s). Interviewing individuals with personal knowledge is critical. Also, they should interview witnesses as early as possible because it will limit the harm arising from loss of memory, witnesses becoming unavailable, and inadvertent loss or destruction of key evidence.

Continued Next Page:

• Importance of following these guidelines:

1. Consider the ultimate goals of the investigation.
2. Develop a list of key issues raised in the initial assessment.
3. Determine the level of discretion that is required.
4. Determine if there are any constraints (e.g., time, resource, authority, procedural, legal, or practical). (Identifying such limitations helps ensure that the team can meet realistic objectives and develop alternative strategies.)
5. Consider the quality of the organization’s anti-fraud program and policies.
6. Consider the organization’s actual culture of compliance.
7. Determine the extent to which mid- and senior-level management is involved in the suspected misconduct.
8. Determine whether the issue is widespread or isolated to a particular area.
9. Ascertain whether the suspected misconduct was prohibited by the organization’s compliance program.

• Internet and Technology assist in a fraud Examination:

Another department that needs to be involved is the information technology (IT) department. The IT department might need to be part of an investigation to safeguard data until it can be analysed. IT personnel can also help identify what data are available and where, and they might be able to function as forensic investigators if licensed to do so. Again, management must restrict access to certain pieces of information on a need-to-know basis. If fraud occurs, it is likely that a computer was involved. If so, information technology (IT) department personnel might need to be part of an investigation to help identify what data is available and where it is located, as well as to help safeguard the data until it can be analysed.

• Why is it important for an employer to have policies in regards to employees rights?

The human resources (HR) department should rights of employees be consulted to ensure that the laws governing the in the workplace are not violated. Such involvement will lessen the possibility of a wrongful discharge suit or other civil action by employees. Also, involving HR personnel can help provide access to the organization’s policies and any employee information that might be needed.

                   Moreover, HR can help the team understand office procedures, and if needed, it can help place suspect employees on paid leave if necessary. Although the team might need advice from a human resources specialist, normally this person would not directly participate in the investigation. Generally, an employer can ask employees to keep an investigation confidential when there are legitimate business justifications for making such requests. However, it is usually not wise for management to implement a blanket policy prohibiting employees from discussing employee investigations, because doing so could violate certain employee rights. Some countries, such as the United States, guarantee private-sector employees the right to organize and engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. If an employer in such a jurisdiction has a routine policy or practice of asking employees not to discuss matters that are under investigation, the policy or practice might violate the employees’ right to organize and engage in other concerted activities.

                              Hence it is important for an Employer to have policies in regards to employees rights.

End of Answer……Thank You…..