5 Immediate Steps When You Discover Potential Fraud

 In Articles

Whenever fraud is discovered, a few hours or days will become frustrating for a company. Should your company maintain a whistleblowing system, you would have the procedure necessary to help you through the hardest days while those who have not maintained one, the situation could be way more complicated. But, here are the immediate action steps that can guide you upon discovering a potential fraud:

1. Safeguard potential evidence. The potential evidence is the key to investigate the fraud case. Therefore, it is critical to secure any potential evidence in a careful way. Avoid the temptation to examine the evidence by yourself. If it is possible, place the evidence in a secure area. Most of today’s frauds involve a computer or an electronic device at some stage. Simply turning on or off the device can alter the potential evidence.  

2. Document the date, time, and other details related to the initial discovery.

3. Maintain confidentiality. Do not confront the potential suspect. Inform only a few people who need to know about the discovery or request to have a closed-door meeting with the HR representative.

4. Remove suspect’s access to the evidence (e.g., computer, email, etc) and do not allow anyone, including the IT department, to examine the computer or other evidence.

5. Gather an investigation team. Enlist a forensic accountant, computer forensic specialist, and investigator. It is important to ensure each of them has professional integrity and is suggested to hire the accountant and the specialist from outside as using the in-house ones might be concerned with the objectiveness during the investigation.

The immediate steps you take in addressing the potential fraudulent action can prevent your company from greater losses.



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