Fraud investigators work to protect consumers and organizations by identifying and investigating fraudulent activities, such as financial reporting fraud, asset misappropriation, money laundering and bid rigging. In addition to conducting fraud investigations, fraud investigators also work with organizations in developing measures to protect themselves from becoming victims of fraud. Measures to deter and detect fraudulent behaviors include internal controls, such as segregation of job duties and accounting remediation.

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Financial reporting fraud

Financial reporting fraud occurs when an individual or organization purposely reports erroneous financial information to capital markets in order to deceive or gain unfair benefit. Types of financial reporting fraud include exaggerating revenues and assets, minimizing costs, expenses and liabilities and misapplying generally accepted accounting principles.

I recommend: Refer to PricewaterhouseCoopers for more information on financial reporting fraud.

Asset misappropriation

Asset misappropriation is a common fraud scheme that involves the mishandling or stealing of company resources. The implementation of internal controls such as supervision of employees, authorization procedures, segregation of duties and software applications can help companies deter or detect asset misappropriation.

I recommend: Refer to Sequence for more information on asset appropriation.

Money laundering

Money laundering is the act of covering up funds that one or more individuals are obtaining illegally in an effort to make the transactions appear legitimate. This is done by concealing the sources and destinations of the illegally acquired funds.

I recommend: For more information on money laundering, refer to the Internal Revenue Service website.

Bid rigging

Bid rigging occurs when an individual or group establishes unnaturally high prices on goods and services that prevent consumers from receiving the best price due to the lack of market competition. Types of bid rigging include subcontract bid rigging, bid suppression, complementary bidding or bid rotation.

I recommend: Consult the Office of Attorney General for more information on bid rigging.

Internal controls

Internal controls are those processes found in accounting companies aimed at not only increasing efficiency, but also preventing and detecting fraud. Internal controls established by organizations include the implementation of passwords, authorization procedures, segregation of duties and review of financial statements.

I recommend: Refer to the Indiana University website for more information on internal controls.

Accounting remediation

Accounting remediation enhances the integrity and functioning of finance and accounting procedures. Accounting remediation involves securing software and physical assets, completing regulatory filings and generating analysis reports for banks and auditors.

I recommend: Refer to Alvarez and Marsal to read more on accounting remediation.

A fraud investigator is skilled in fact-finding and can help you uncover any wrongdoing within your organization. A good fraud investigator will be objective and will review all evidence before making a conclusion on whether or not a fraudulent act was actually committed.

A fraud investigator will collect and analyze various types of data including company emails, computer files, hard-copy documents and testimony. As technology continues to evolve, the primary source of evidence found during a fraud investigation is generally data, transmitted via a computer or other electronic device. The fraud investigator may also review historical audit data and any previous investigation files. Consider the following reasons to work with a professional fraud investigator:

1. A fraud investigator is highly skilled in gathering and analyzing various forms of data.

2. A fraud investigation is time-consuming and can delay business activities.

3. A fraud investigator will ensure the investigation is properly performed the first time around.

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Gather data quickly with a fraud investigator provider

A spreadsheet or database that tracks documents will help you easily and quickly access data requested by the fraud investigator. You and your staff will have critical roles in the fraud investigation process by helping the fraud investigator provider learn more about your business activities and identify personnel data access and responsibilities.

I recommend: Daylight Forensic & Advisory is an international fraud investigator provider with extensive experience in gathering and analyzing data for business owners. Pappas & Company offers fraud investigation services to help businesses detect company fraud.

Use a fraud investigator to prevent fraud

Having an in-house fraud investigator can be beneficial because you'll always have someone to monitor any fraudulent activity within your business. These courses along with a fraud prevention provider can help you stop fraud before it actually occurs.

I recommend: Pay for training from Certified Tech Trainers. With this course, you can designate an employee to learn how to interview other staff members for internal fraud investigations. This course can also help your employee gain a better understanding of how to detect fraud. Take the necessary steps to avoid fraud by consulting with Fraud Prevention Solutions. This fraud investigation provider believes that due diligence is a person’s best prevention tool against fraud and you'll find them listed on at least one online fraud investigator directory.

Find fraud investigator services

A fraud investigator can manage the data collection and analysis process so that you can focus on managing daily business activities. The fraud investigator list of evidence will generally have all documents sorted by suspect, witness or transaction so that he can clearly track data and assess any fraudulent acts.

I recommend: Fraud Practice offers extensive risk and fraud investigator information to help you understand the fraud investigation process. Kessler International performs fraud investigations and audit reviews.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Cooperating when the fraud investigator requests business documents will speed up the process. Remember that you hired the fraud investigator to conduct a thorough fraud investigation--provide this individual open access to your business files and work product, so he can do his job quickly and accurately.

If you're considering a career as a fraud investigator, you'll need to start with fraud investigator education and training. Proper education and training can prepare you for a career in many types of fraud investigation, including insurance fraud investigation, workers compensation fraud investigation or identity theft fraud investigation. Fortunately, there are several avenues you can pursue to receive fraud investigator education and training.

Some colleges and universities offer live or online courses in fraud investigation. Several training institutes are currently in operation that specialize in training fraud investigators. You can also choose to attend live or web seminars that teach about many aspects of fraud investigation. Read on to find out more about these ways in which you can receive fraud investigator education and training:

1. Enroll in college courses in fraud investigation.
2. Attend training programs given by fraud investigator training institutes or federal programs.
3. Sign up for seminars geared toward fraud investigators.
   

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Take fraud investigation courses at a local college or university

The law, criminal justice or accounting curriculum at some colleges or universities often include courses in fraud investigation. Corporate fraud, insurance fraud and tax fraud investigation are some topics you might find addressed in these courses.

I recommend: The Duke University School of Law offers a fraud investigation course that covers many types of fraud, as well as investigation methods and procedures. Several classes in the accounting program at Guilford College focus on fraud and fraud investigation. The online MBA program in fraud management at Utica College offers an elective course in fraud investigation techniques.

Complete a training program at a fraud investigator training institute or program

If college isn't for you, there are other ways in which to get fraud investigator training. Some learning or training institutions have courses designed specifically for certain types of investigators, including fraud investigators. Even some government agencies provide fraud investigator training programs.

I recommend: The course in fraud investigation methods at Investigation Training Institute teaches students how to investigate many types of fraud crimes. The Federal Law Enforcement Training Center offers a complete program for those wishing to become financial fraud investigators. The American Educational Institute offers several self-study courses in fraud investigation.

Learn about fraud investigation through live and online seminars

Live or web-based seminars can provide intensive training in many areas of fraud investigation. Seminars typically have experienced investigators as keynote speakers and often dedicate more time to one particular aspect of fraud investigation. Seminars might also be one way to get continuing education in the field of fraud investigation.

I recommend: The Institute of Internal Auditors holds seminars that teach about internal audit and the role it plays in fraud investigations. The National Society of Professional Insurance Investigators (NSPII) hosts a seminar in insurance fraud investigation. Attend a seminar for insurance fraud investigators hosted by the International Association of Special Investigation Units (IASIU).