1. Explain why, ideally, it Is best that the person initially receiving an incident report not collect evidence before deciding whether an investigation is warranted.
2. What are some possible benefits of conducting an investigation under the attorney-client privilege?
3. How can a fraud investigator document a case against an embezzler who destroys the accounting records to the point that it is not possible to produce a reasonable estimate of a loss?
4. What is the relationship between a fraud theory and the steps in the evidence-gathering process?
5 Give an example of how catching a fraudster in the act can save considerable investigation expenses.
6. How does hypothesis testing predication? in fraud investigations relate to the principle of predication?
1. The incident report is a form that is filled to record details of an unusual event that occurs. The person initially receiving an incident report has the training and experience to evaluate the incident based on the report. The person must make an independent and objective judgment based on the incident report whether an investigation is warranted. If the person begins collecting evidence, his judgment is likely to be affected by the evidence collected. Systematic evidence collection can only take place during an investigation. Collecting evidence before deciding whether an investigation is warranted can wrongfully cloud the judgment of the person receiving the incident report and lead to an inappropriate decision.
2. The attorney-client privilege protects communication between a client and his attorney keeping the communication confidential. An investigation under the attorney-client privilege has several benefits. First the client provides opinions about the fraud that he would otherwise not make. Second, since the communication is confidential, the client provides personnel information and backgrounds that are otherwise confidential. Third, during the investigation the investigator can ask for specific ...
The answer to this problem explains questions relating to accounting fraud investigation. The references related to the answer are also included.