March 25, 2018

Investigating Fraud & Deviant Behavior

All organizations will inevitably encounter some type of fraud and/or employee deviant behavior.  When you do, you need advisors with experience, who have handled similar situations.  Before we begin, a word of caution.  Depending on the nature of the matter your are facing, you may first want to consult with your attorney who then can engage us to help.  There are a number of potential legal pitfalls.  We would be glad to provide you with some general guidelines – Contact Us.


We can help you by taking on various roles in fraud and other types of investigations such as HR related matters.  Some of our previous roles include:

  • investigators engaged by outside legal counsel to find the facts about a situation or incident
  • Lead internal investigations coordinated by the organizations Chief Legal Counsel
  • Review the investigative approach and results of a matter investigated by another group and/or a client’s internal group
  • Assess an organization’s internal investigative protocols
  • Investigation training for human resources, compliance, security, and internal audit professionals

Our investigations have included issues from bribery & kickbacks & embezzlement to allegations of sexual harassment.

Forensic Audits

Making money but not able to pay your bills?  Not sure how the numbers are coming together?  Are your accounting records in a state of disarray?  If you answered “yes” to any of these questions, you may need a forensic audit.  Generally speaking (and in summary format) when we conduct a forensic audit we do the following:

  • Gain an understanding of your organization and get to know your employees
  • Determine where the value resides in your business (i.e. cash, inventory, investments, intellectual knowledge, data, etc.)
  • Analyze (and a lot of times organize) your transactions (i.e. consider what the numbers should look like verses what they actually are)
  • Look for red flags of fraud (accounting transactions that don’t add up, issues with cash or other things of value)
  • Provide a report on our findings and assist with next steps
  • Assist with enhancing processes and controls to prevent future occurrences

Not every forensic audit reveals fraud.  Many times when we conduct a forensic audit we find sloppiness and human error.  This is something that is determined during steps two and three above.

Sometimes a forensic audit turns into an investigation.  It is important to note when this happens for the reasons we discussed above.

Some other tips to keep in mind if you think there could be wrongdoing in your organization:

  • Don’t accuse anyone
  • Don’t rifle through anyone’s desk, locker or personal belongings
  • Don’t search a suspects computer
  • Don’t record conversations
  • Don’t spy on suspects
  • Don’t take the investigation on yourself

If you have any questions, contact us or your attorney.

Good Business Practices Help Prevent and Deter Fraud

The fancy consulting speak term for this is “Anti-Fraud Programs and Controls” (AFPC).   These business practices span many aspects of your organization.  The bottom line is that if you have a well run business, you have many pieces in place from an anti-fraud programs and controls perspective.  Some of the key components include:

  • Hiring & Promoting the Right Employees
  • Smart Internal Controls
  • Policies and Procedures
  • Training
  • Creating and Maintaining a Positive Work Environment (climate and culture)
  • Lines of Communication for Concerns (open door policy & independent concern line) Without Fear of Retaliation
  • Understanding What Could Go Wrong (where are you vulnerable?)

Yes, simply running a solid business helps deter fraud!  Preventing fraud and deviant behavior in the workplace goes beyond internal controls.  It comes down to the people in your organization many times.  Here is a tip, you treat the people in your organization the way you want to be treated, you have just implemented one of the most effective anti-fraud controls!  We can help you tie everything together.  No consultant speak and your business will be much better off.