Fraud Investigator Key Terms

Fraud investigators can help an organization detect and deter fraudulent behavior

By Renee Baumgardner

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.

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