Fraud: what to do?
Что делать в случае мошенничества

Fraud: what to do?

You are the owner/manager of a company and you think there is a fraud: what to do now? 

  •  As long as you are not sure (and you need to investigate first) do not say anything to any people who might be possibly involved. Only when there is rock solid proof, only then you can confront your employee;

  • Make sure you have and keep access to all important information. Especially if the suspected fraud is done by top management and/or in the finance department. Make sure that your back-up system of all IT systems is working properly. Do you have access to all hard copies of documentation?

  • Can you get access to a copy of your bank statements? Most banks provide this in print, or as a download. Do you have the authority to request a copy? This is important in order to compare the original bank statements with these which are recorded in your bookkeeping system.

  • Do you have access to email systems? Do you have a system in place where your email administrator can search emails on key words? Do you have copies of emails, even if they have been deleted? Some email servers give this option.

  • Is there an overview of authorities of employees? Who have received power of attorneys to make decisions? How is this organized with the bank? Are there any informal workaround where users with authority have given passwords or codes to other employees?

  • Are all important documents available for an investigation: how are they being stored physically and digital, where is the storage, are there regular back ups? Can suspected have access to files and can they be erased? Do you have a master copy that is accessible on another computer?

  • Start recording all actions and allegations. Where does the signal of fraud comes from, and what are these signals? The better the initial documentation, the faster fraud investigation will give results.

  • Keep in mind that in a fraud investigation by an auditor there is always the obligation to hear the suspects as well. There should always be an opportunity for the other side to give their side of the events. This can lead to ‘wash the dirty linen in public’ to the investigator, where other elements of non-transparency within the organisation (especially the top management) can come to light. The investigator cannot ignore such information and might need to do additional research. Are you sure that your organisation is ‘clean’?

  • All documentation need to be tested on facts and need to be able to serve in a court case. That is, in the end, what ‘forensic’ means. Are you sure your documentation is compliant?

  • Have you asked for legal advice?

  • Have you engaged a forensic auditor?