The day feared by every business owner arrives: you suspect an employee of stealing from your company. It’s only a hunch and you don’t want to act prematurely, so you start your own internal investigation. After a few days or even weeks of detailed analysis and painstaking work, you have gone from cautious concern to bold accusations. Justice must be served, and you will see to it!
It is only natural to become passionate when realizing that someone you know, trust and many times have worked with for years has most likely been engaging in unlawful and unethical activity. You’ve worked hard to protect and grow your company, and it is unthinkable that someone internal could be capable of fraud. While preliminarily reviewing records to confirm your understanding is a good idea, engaging in a full blown investigation, including review of digital data and interviews of the suspect and other associates may not be. Without proper training and consideration of risks, individuals and companies can find themselves in hot water while the suspect goes free.
Here are three common pitfalls that can set internal investigations off on the wrong foot, and suggestions for how to avoid them:
- Mishandling of evidence: While it may seem like a good idea to take physical control of the suspected employee’s laptop and review his e-mails to find the “smoking gun,” you first need to consider that this laptop and the data contained on it may be needed in an unaltered state as evidence for future legal proceedings. Using this computer will alter the employee’s digital footprint and may even be considered evidence tampering, thus rendering any information on the computer inadmissible in legal proceedings. Companies should consider consulting with a professional services firm that offers forensic reviews before cracking open the computer.
- Confronting employees alone: Businesses are especially at risk when an individual company representative decides to confront the suspected wrongdoer and does so alone. These types of meetings can result in a “he said, she said” situation or worse, a situation where the wrongdoer actually accuses the company representative of wrongdoing. Depending on their claims, the company may need to dedicate resources to defending their actions, resulting in unnecessary administrative and financial burdens. Companies should consider engaging an attorney who can guide management’s contact with the suspected wrongdoer. This step can help protect the company and its representatives from personal and corporate liability.
- Jumping to conclusions: When an individual is suspected of wrongdoing, it is easy to consider all his activities under the same cloud of suspicion. The rationale is often, “well if the employee did this, then I’m sure he did that, too!” But the reality, however, is that the facts have to speak for themselves. If a company is unable to keep an impartial view and maintain the attitude of “innocent until proven guilty,” it is best for them to engage an independent firm to conduct a thorough and objective investigation.
Considering each of these areas before starting your own internal investigation can save you time, energy and money in the long run. Want to make sure your internal investigation is handled efficiently and effectively? RKL’s Business Risk Services team can help – contact us at (717) 394-5666.
Contributed by Marcia Hoffacker, CIA, CFE, CRMA, Business Risk Practice Leader for RKL’s Business Consulting Services Group. Marcia has extensive experience in the areas of business risk identification, evaluation and management; fraud prevention, detection and investigation; and internal audit services.