Protecting Your Assets: What Is Fraud Examination?

Few things can be more damaging to an individual’s well being than fraud. It can be a costly problem to solve and work through. Many organizations and businesses suffer significant losses due to fraud.

Fraud examinations are a process that helps organizations to determine if fraud has or has not occurred. It is a research and evidence gathering process that often will depend on many resources being culled together.

How exactly does a fraud examination proceed? Read on, and we’ll walk you through what you need to know.

What Are Fraud Examinations?

A fraud examination is exactly what the name suggests. It is the full process of exploring fraud allegations from inception to disposition. It involves collecting evidence and building a case. It also consists of the detection and prevention of fraud, to begin with.

These examinations often require the work of those knowledgeable in accounting, auditing, law, and criminology. A fraud examination is not an investigation that just anyone can undergo. It requires a great deal of experience and background.

There are several reasons why a business might conduct fraud examinations. Some of them are quite obvious: a desire to identify illegal conduct, to prevent fraud in the future, to determine the extent of potential losses resulting from such behavior.

Through the process of fraud examination, many companies hope to find a way to make up some of the losses they may have experienced due to fraud within our outside of their organization.

In some situations, a fraud examination might be necessary to undertake due to local laws. In many cases, large organizations are responsible for frequent fraud investigations to remain open and honest to their many shareholders. 

Fraud examination is a necessary and vital thing. There is a growing industry surrounding the process as a result of this importance. 

How Does a Fraud Examination Work? 

There are many tasks involved in pulling off a fraud examination. Many different aspects of work might fall under the umbrella of the investigation. 

Obtaining Evidence

First and foremost, the collection process. A fraud examination will only be able to make a substantial impact if the evidence collected can be found to be credible. Various forms of evidence might be used to prove fraud.

Often, witness statements are a big part of these cases. Documentation and paperwork often are used as a main form of evidence as well. For this reason, those that work as fraud examiners must be well equipped in the art of obtaining evidence from witness statements. 

On top of that, a strong fraud examiner will need to take these various forms of evidence, analyze them, and present them in the best possible light in terms of clarity. Often, these findings will need to be delivered to board members, management, and various committees.

That means the conclusions drawn from the evidence need to be well defined and easy to understand. Often, a fraud examiner will employ private investigators in order to get the evidence that they need to make their case.


In a way, a fraud examination is a study of a lack of transparency somewhere within or close to an organization. For this reason, the investigation itself must proceed with the utmost clarity.

During an examination, a fraud examination report will also need to be produced. This is a step by step recollection of the various steps that an examiner took to reach their findings and recommendations.

It’s vital that those who look over the examiner’s results can trace back how each finding and conclusion was reached. This will help the heads of the organization make the proper choices following the investigation’s conclusion.

Most of these reports are done in writing and in conjunction with the investigation itself. Clear, unbiased, and accurate reporting is essential to this process.

Later Testimonies

The job of a fraud examiner is not necessarily over once they submit their report. They will often be required to return to the case later on once a business or organization has decided to take legal action.

In many cases, a fraud examiner will be one of the main witnesses in the legal case against the individual or entity who committed fraud. They are often invited to depositions, trials, and other such legal proceedings.

They tend to be the primary expert brought in terms of those who are able to speak about the fraudulent actions that were taken.

Preventing Future Fraud

Fraud examiners are also quite often relied upon to give advice as to how a business or organization may prevent fraud from occurring in the future. They will know the ins and outs of how it was allowed to happen the first time. Thus, they should be in the ideal position to suggest fixes and safeguards.

They are often asked to provide policies and potential procedures to integrate that might help to prevent fraud in the future. This isn’t a necessary part of the process, but it remains a common one nonetheless.

Sometimes, fraud examiners are even brought in before a case being present to help an organization attempt to safeguard itself against the chance of fraud.

Understanding Fraud Examinations

If you’re thinking of hiring a certified fraud examiner, you might be curious about what fraud examinations entail. The above information can prove to be useful in learning about the ins and outs of this process.

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