Forensic Accounting: How to help during the investigation process

Hoyman Dobson's Forensic Accounting services include:

Advice to lawyers and their clients involved in current or contemplated litigation
Unraveling of complex financial transactions
Valuation of a business and its assets
Consulting on business interruption and loss of profits
Identification from a financial perspective of relevant facts to be pleaded
Determining the types of documents to be recovered
Fraud risk assessment
Expert witness testimony
Training on fraud-related issues
Implementation of internal controls to prevent fraud
Services provided by professionals with the following designations:

Services provided by Hoyman Dobson professionals with the following certifications and memberships:

Certified in Financial Forensics (CFF) professional, a credential obtained through the American Institute of Certified Public Accountants (AICPA)
Diplomate of American College of Forensic Examiners
Member AICPA Forensic and Valuation Services Section
Contact: Debbie Goode, Audit Director. Email or call 321-426-3040

A company can be subject to very expensive acts of fraud if internal controls are not properly in place. Unlike assault or housebreaking, fraud is non-violent, “white-color” crime. Yet fraud can be just as damaging to the community as violent crimes, and its financial ramifications can cause ongoing financial issues for stakeholders.

If you suspect fraud is taking place at your business, here are some ideas to keep in mind as you start the investigative process:

Make it a team effort. Normally when you suspect fraud, an internal investigation is inevitable. And an internal investigation will involve your company’s attorney or legal counsel, forensic accountants, and your internal and independent auditors.
With the help of your legal counsel and forensic accountant:
- Cast a wide net of investigation. By doing so, you will be able to reveal how widespread the effect of suspected fraud is within your organization. Think about which areas may be affected by the alleged fraud activities. Among other measures, you may:
  - Place a freeze on all documents subject to the investigation. That will help prevent their destruction
  - Interview people who may have knowledge about the suspected wrongdoing
  - Develop a potential list of suspects
- Develop and follow a work plan. A work plan will address:
  - The scope of suspected fraud
  - Which techniques to use to identify sources
  - What information to gather and evaluate
  - How to manage the investigative process
    This would be a fluid plan, as new information comes to light.
- Outline the role of your internal auditor. The leader of the investigation efforts will decide the role of the internal auditors in the investigation process.
- Communicate with employees. Now more than ever, communication with your employees and other stakeholders must be very carefully planned. Make sure the problems are completely understood and quantified before you release the information to those who are affected by the investigation.
- Document the investigation and its conclusion. The report (oral or written) should detail the investigative method, what type of technology was used, an outline of gathered documents, names of the people who were interviewed, the results of the investigation, conclusion, and proposed remedies.

During an investigation of suspected fraudulent activities, your goal is to create a clear outline of information to determine and evaluate the extent of the suspected fraudulent activities and their effect on the company. Your investigation will be successful when you use the right team, procedures, and follow the proper order to create a clear set of data. The results will then be used to conclude the investigation, and implement the control processes to reduce the potential of future fraud.