ACFE - Cross Border Investigations (Part 1)

FRAUD BASICS
Fundamentals for all
Which of the following has been the primary trigger of most of your
company’s recent cross-border investigations?
Internal audit finding
Leads provided by someone (employee)
inside the company (other than whistleblower
program)
Leads provided by someone outside the
company (other than a regulatory body or
law enforcement)
Notification by regulatory authority or law
enforcement
Red flags or findings arising from compliance
due diligence
Whistleblower program
privacy and confidentiality, company
property and potential evidence.
As a lead investigator, with consent
from management, here are the steps
you should take when you unearth an
issue and you’ve determined the credibility
of the allegation:
• Understand the underlying substantive
issue involved in the allegation.
• Ensure objectives are clear and
defined.
• Clearly establish a reporting structure
with points of contact.
• Alert your standing investigation
committee.
• Begin an investigation diary.
Figure 1: Primary triggers of most cross-border investigations.
How important are the following to the execution of a successful
cross-border investigation?
Hiring the right external resources
Effectively utilizing internal resources (including people and technology tools)
Managing expectations of senior management
Having a detailed investigation plan
Effective communications throughout the course of the investigation
Proper planning and identifying the scope
Least important
Note: Chart shows average score for each success factor.
Most important
• Determine the documents and data
you need to compile to conduct the
examination.
• Devise a data security strategy.
• Keep a current backup copy of
e-documents.
• Identify relevant witnesses to whom
the fraud examiners should be
speaking.
• Develop credible communication
channels with the whistleblower/
informant if they’ve disclosed their
name(s). Draw a linked analysis with
the known facts and those provided
by the whistleblower. You’ll fill in the
gaps later. Use the analysis to match
the potential wrongdoings.
Figure 2: Important elements for the execution of a successful cross-border
investigation.
• Clear and timely transfer of information,
notifications and deadlines to
employees or their representatives
plus governmental agencies and law
enforcement.
• Determination of the type, jurisdictional
authority and time frames in
which possible disciplinary action(s)
will be taken.
• Determination of cost parameters.
• Also, see Figure 2 above, “Important
elements for the execution of a successful
cross-border investigation.”
Always take baby steps when
creating your examination plan. If you
don’t construct it well, you’ll reenact the
Battle of Waterloo. You want to protect
the integrity of all players, the process,
• Choose a subject matter expert (SME)
who can help you make early decisions.
Always run the evolving investigation
plan by the SME whenever
possible. Assign a backup team member
to replace the SME if that person
has to return home for personal,
health or performance reasons.
(See Figure 3 on page 11 for the
KPMG report’s participants’ responses
on the nature of their cross-border
investigations.) n FM
10 FRAUD MAGAZINE JANUARY/FEBRUARY 2018 FRAUD-MAGAZINE.COM