Monday, August 2, 2010

Roles of the different disciplines involved in fraud investigations

The auditor/accountant:

The auditor plays a vital role in fraud prevention with regard to fraud risk assessments, surprise audits and other auditing-related activities.

The role of the auditor in the fraud detection process is even more wide-ranging. Studies have concluded that internal auditing and internal controls are responsible for the majority of fraud detection. In forensic investigation process the auditor is the one likely to end up on the witness stand to present testimony on his/her findings.

In fraud and other economic crime that often involve complex financial transactions the auditor’s role is to analyze and investigate these transactions and to reach certain conclusions about them.

The auditor gathers documentary evidence that is relevant to the investigation and the auditor’s report, forms part of the case docket that is ultimately prepared for the criminal trail. Auditors usually testify about facts only gain on their findings on relevant transactions.

The role of the forensic auditor is to gather evidence. They deal almost exclusively with facts. The forensic auditor must therefore remain objective and allow the facts to lead to the correct conclusions. For a forensic auditor to perform his/her function properly, it should have certain skills and knowledge that auditors would not necessarily have. The ability to draft a proper affidavit is an example a workable knowledge of law. Be familiar with law of evidence and rules pertaining to admissibility.

The legal specialist:

The role of the legal specialist is to ensure that the teams function within the parameters of the law and to ensure that fundamental rights remain protected. He must be aware of the complexity of the criminal and civil process that contains many pitfalls.

He must ensure that the case is prepared within the parameters of the law and that the evidence is obtained in a manner that will not render it inadmissible in a court of law. He should be accessible to all other team members for any assistance they may require.

He should review all working papers and other documents in order to ensure that it complies with legal requirements. He is the watchdog, who has to ensure total compliance by the team with all relevant rules, regulations, legislation, ethical boundaries etc. It is of utmost importance that the legal specialist should ensure throughout the investigation that the team operates within the terms of reference.

The investigator:

He brings the investigative skills learned from being a former or current member of the SAPS or other investigative agencies. He will typically conduct the interviews, take down the witness statements, gather documentary and physical evidence, and keep the investigation diary update an compile the case docket and/or working papers.

Most of the physical field work is conducted by the forensic investigator, who will also conduct background searches and checks, do tracing of persons, compile warrants and subpoenas etc.

An unlimited number of other experts may also be included in a forensic auditing team. Examples are computer specialists, handwriting and contested document specialists, independent consultants of various disciplines, valuators, engineers, medical experts etc.. The nature of the investigation and the particular industry in which the audit is conducted will dictate the special skills that are required. In some cases these specialists may be required to give expert testimony with regard to their findings in court.

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