Question

What are the elements of a forensic fraud investigation report, and explain how they could be used to support case preparation in a case like Enron?

Answer 1

Following are the key elements of a forensic fraud investigation report

The report should

• evidence a timely and impartial institutional response,
• accurately document the investigation conducted,
• provide decision-maker with facts needed to decide the matter, and
• ensure a successful investigation.

Forensic reports can help prepare in cases like Enron because they involve a detailed investigation of facts occuring during and around the time of a particular risk bearing financial transaction. The forensic fraud investigation reports include a detailed examination and explanation of the facts and transactions that lead to potential frauds. The detailed investigations are based on following key practices

1. Factual Background - study of factual back ground involves understanding of several aspects of a transaction not limited to following:

• Departments or units involved

• Relevant activities of the unit

• Employees involved and employee relationships

• Background facts to the subject allegation or incident

• Factual issues to be resolved

2. Analysis of Evidences Gathered - Each and every evidence gathered during the forensic investigation is tested for several parameters, to name a few:

• Describe the evidence in support of each position

• Weigh the facts

• Identify the relevant facts

• Dismiss the irrelevant facts

• As to disputed facts, assess credibility

Based on the above facts and evidences the forensic investigation experts also submit their conclusions about the existence or non existence of fraudulent practices in the organization. Such conclusions can further be used by various stakeholders to assess the impact of frauds such as Enron and can be used in the court of law against the parties to fraud.