By Jolene Fraser
When faced with suspicions of possible fraud within your organization, the immediate response may not always be readily apparent, especially if there are no protocols or procedures in place for such a situation
No one thinks they’ll be a victim of fraud within their own business, but the unfortunate reality is that it happens more often than you think, often with employees you may trust the most. If you’re faced with fraud at your organization, it’s important to take the appropriate steps to quickly address and mitigate the situation. Here are some important suggested steps to take if you suspect fraud within your organization.
1. Consult Legal Counsel
If you suspect fraudulent activities within your organization, a prudent first step is to consult your legal counsel. Involving legal counsel at the start of any internal investigation will provide guidance in efforts to preserve evidence; adhere to internal protocols, rules and guidelines; and develop a plan to investigate and mitigate the suspected fraudulent activity.
2. Communicate with Those Charged with Governance
Another important step is to begin consulting with HR, senior leadership or whomever oversees internal governance and policy. Those charged with governance need to be on the same page with their understanding of the investigation, the appropriate steps to be taken, and communications to be made (both internally and externally) on the situation.
This is an opportunity to learn from whatever issues present themselves to proactively implement protocols and controls to avoid any future fraud of the same nature.
3. Consider Engaging a Forensic Accountant
In situations that involve a potential monetary loss, it’s important to consider leveraging a trusted and credentialed forensic accountant to investigate issues discreetly and professionally. Whether it be taking a deep dive into uncovering accounting anomalies or looking into issues such as vendor fraud, it is often difficult to uncover potential fraud schemes without a professional investigation.
4. Document Discovery and Response
When you suspect there is fraud or other suspicious activity in your organization, one of the most important recommendations is to document both the discovery and all actions taken in response to the situation. Formal documentation of the steps followed and adherence to any prescribed protocols, policies and procedures is ultimately a preventative measure that will aid in protecting your organization.
Jolene Fraser is a Managing Director in the Forensic, Litigation and Valuation Services Group at EisnerAmper. She has 25 years of public accounting and consulting services experience. Jolene works with clients on financial issues throughout the litigation process across a wide variety of industries.