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This Is How Workplace Investigations Can Prevent Fraud in Your Business: 3 Tips on How to Do It

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Accusations of fraud and employee misconduct can be damaging to any business, as they can drain finances, erode consumer trust, and stunt opportunities for growth. To effectively prevent fraud, it’s important to make sure there are processes in place to investigate suspected incidents of wrongdoing. This guide explains how workplace investigations can play a critical role in helping businesses deter and prevent fraud.

A workplace investigation is an in-depth inquiry into issues such as illegal activities, unethical conduct, and other forms of misconduct or wrongdoing in the workplace. This type of investigation is conducted on behalf of the employer to protect the company against physical or financial losses that may occur if fraud or other criminal practices go undetected and unchanged.

The steps taken during a workplace investigation can vary depending on the nature of the misconduct and the size of the business. It might include interviews with staff members, a review of records for evidence and suspicious activity, or an analysis of company policies related to fraud prevention.

A thorough investigation should also include accessing databases that can provide information about previous criminal activity by employees, customers, or suppliers. Furthermore, investigating digital channels used within the business – such as emails and instant messaging – can help detect any potential signs of fraud or other illegal activities.

Benefits of workplace investigations

Done correctly, they can be used to detect and take proactive steps to reduce the potential for fraud, as well as to quickly identify and correct any issues that may have arisen.

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Furthermore, they can help foster a culture of transparency and trust within the organization, leading to greater productivity and enhanced morale. Let’s take a look at some of the key benefits of workplace investigations in more detail.

Reduced risk of fraud

These investigations can be instrumental in identifying and helping to prevent fraudulent activities from occurring in an organization. By conducting investigations, companies will proactively identify any potential weaknesses in the system that could leave the organization at risk of fraud or other unethical conduct.

Improved morale

A workplace investigation is an opportunity to examine all aspects of an employer-employee relationship and identify any potential issues before they worsen or cause irreparable damage.

Investigations can provide employees with reassurance that the business takes their concerns seriously and will take action when necessary. This can increase feelings of job security and loyalty and in turn promote better relationships between the employer and employee.

Moreover, by taking steps to ensure improper behavior is identified quickly, employers can subsequently reduce liability risks caused by allowing misconduct to go unchecked for too long.

Improved compliance

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Better compliance with industry standards is one of the most important benefits of workplace investigations. In many cases, an employer can be held civilly or criminally liable for their employee’s actions. Therefore, engaging in workplace investigations can help an organization identify any activities that may be illegal or out of compliance with regulations.

Steps on doing it:

Establishing the facts

It is important to first understand the facts and to gather as much evidence as possible. All gathered evidence should be secure, complete, and accurate in order to ensure a fair and just outcome. Depending on the situation, this could include interviews with involved parties, witnesses, background checks of individuals involved, document review and analysis, physical evidence analysis, or digital forensic investigations. It is essential that all data sources are properly preserved early on in the process.

An effective investigation plan should include details on who will conduct the investigation; any potential conflicts of interest and how they will be addressed; identify who should be interviewed, and specify what records need to be collected for review.

Additionally, when interviewing individuals implicated or accused of wrongdoing in an investigation it’s important to remember that employees have certain rights that need to be addressed prior to any questioning taking place. These rights may vary depending on the company’s country/region or state law but commonly include access to legal counsel, protection from retaliation from current/former employers (whistleblower protection), notice that their statements may be used in disciplinary action or legal proceedings, etc.

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Creating a comprehensive investigation plan reduces scope creep by establishing clear boundaries for what documents need to be gathered and who needs to be interviewed during the course of an investigation. This document should also include relevant reporting timelines so that management can stay informed of progress updates throughout the process.

Interview witnesses

If the initial investigation reveals the need for further information, an employer will likely want to question any relevant witnesses. This is an important step because interviews can provide additional insights into what happened or who might be responsible.

Witness interviews should be treated as serious investigative efforts. Employers should set specific interviewing goals and create processes to ensure that all relevant questions are asked. It is also important to have someone document the interviews, either through note-taking or recording, so that all relevant details are captured accurately.

Before conducting a witness interview, the employer should create a list of questions they would like answered and they should determine which employees (or others) will conduct the interview. Normally, it’s best practice to have two people present during an interview in case one fails to ask a crucial question or make important notes. Most employers are wise to bring in an external investigator if they believe sensitive material may be discussed.

It is also essential that employers remain professional and non-confrontational when interviewing witnesses. All parties should be reminded of their duty of confidentiality, so whatever is discussed stays confidential; this includes not sharing any information about those interviewed with those who were not part of the process without their express permission.

Collect evidence

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The goal is to make a factual determination about what occurred and whether the employee’s conduct violated company policy or the law. The evidence should be objective and preferably from multiple sources. It is important to document the evidence in a clear and concise manner that can be used in court if necessary.

It’s also extremely important to ensure that the evidence has been collected lawfully, as disregarding the legal rights of individuals during the gathering process can result in serious repercussions for your organization.


The key takeaways from this guide are clear: Workplace investigations can be an important component of preventing fraud in your business. By conducting investigations into suspected or actual fraudulent activities promptly and objectively, businesses can not only protect the interests of their organization and customers, but also those of the affected employees.

It is essential to establish a comprehensive anti-fraud program to ensure that all applicable regulations are followed, as well as implement strong internal procedures such as developing policies for reporting suspicions of fraud and guidelines for conducting investigations.

Source: workplaceinvestigation.com.au