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How to prevent fraud in business: An investigation

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Hello readers, I hope you enjoyed part 1, part 2 and part 3 of this article. Today, I will be giving you a brief description on how to carry out a fraud investigation. A fraud investigation should be carried out after receiving complaints whether formal or informal or when it appears that a fraudulent action has been carried out.  The management must create a procedure for carrying out an effective investigation. An internal auditor could assist in evaluating the procedures stipulated by the management.

Procedures include planning the investigation, during this phase; would help investigators such as the internal auditors, forensic accountants , lawyers and others understand the situation during this period. Afterwards, the level of skills required to carry out the investigation should be determined. Evidences could be obtained via interviews, questions that will be asked must have been drafted in advance. Suspect(s) and withness(es) should be interviewed. Evidences can also be gotten from IT systems, ledgers, phone records and others.

Sufficient evidence will suggests that the fraud occurred. A written report of the result of the investigation must be documented. This will help improve the controls you have in place to prevent or detect fraud. The Company should also learn from the investigation and develop their systems to remove loopholes the fraudster(s) took advantage of.

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