To investigate or not to investigate, that is the question!
Take for instance an unused device or a handful of pens that you have taken home from work. Does that make you a thief or a fraudster? What is considered acceptable or unacceptable could be perceived as a grey area. In fact, taking one pen from the office could be regarded as theft despite its negligible value. In practice, the aforementioned will not be sufficient to start an investigation. You don’t have to be a saint, but where do you draw the line?
Company boundaries are commonly formalised in a code of conduct. All individuals are able to report alleged breaches of the company’s code of conduct, either through direct reporting or using an anonymous hotline. It’s always a challenge to decide if reported incidents are to be investigated or not, as this decision fundamentally shows the investigative ‘appetite’ of your company.
Nowadays, the majority of the internally investigated cases concern employee embezzlement, frauds committed by vendors or contractors and HR issues. The investigative ‘appetite’ for more complex types of investigations, such as for instance financial statement fraud schemes, appears to be much lower. Financial statement fraud schemes are the least common and most costly. From alleged or suspected financial statement frauds, over half of the allegations remains rarely or not investigated. Imagine the effect of the reported allegations that remain uninvestigated.
Contemplate the above before your next assessment what to investigate or not to investigate?
If you want to make the facts count, call KPMG!
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