Suspected Incident of Theft or Fraud? – Tips for Effective Management of Investigations

13 July 2016

Michael Cassidy , National Leader, Forensic Services |

BDO’s Perth Forensic team has assisted organisations by investigating incidents of suspected theft and fraud committed by trusted employees.  The victims have included listed companies and small to medium size businesses, and involved losses into the hundreds of thousands of dollars, usually through the misappropriation of cash or stock over a significant period of time.

In performing the investigations, BDO has identified a number of key themes that impacted the organisations’ ability to effectively investigate the issue and appropriately manage the incident afterwards.

Key themes

  • Not giving adequate consideration prior to commencing an investigation as to the potential outcome, for example civil or criminal proceedings, employee  discipline;
  • Failing to obtain legal advice, prior to commencing or during the investigation;
  • Lack of appropriate internal investigation policies or procedures, which increases the risk that due process isn’t followed, and adequate records of the investigation are not being kept;
  • Appointing unqualified or inexperienced people from within the organisation to undertake the investigation; and
  • Not having insurance coverage for employee dishonesty/theft.

BDO helps organisations by providing services that assist with responding to an incident that requires investigation.  Below are some simple but important steps that can be implemented to be proactive in reducing the risk of internal fraud and theft:

  1. Identify your organisations fraud risks;
  2. Develop policies and procedures in relation to the prevention, detection and response to fraud and misconduct;
  3. Ensure the person responsible for undertaking or managing any investigation is appropriately skilled and qualified;
  4. Consider the legal implications of any investigation to be undertaken; and
  5. Insurance coverage – consider the necessity for employee dishonesty/theft coverage under the business insurance policy.

If you have an issue relating to internal fraud or risk management, or require advice on the investigation and next steps in the event an issue is identified, contact the Forensic Services team at BDO who can help tailor a solution for your needs.