A fraud response plan is a detailed and systematic process of identifying and prioritizing the fraud risks and motivators that lie within an organization. It recognizes the fraud schemes that can emanate from these fraud risks and links the identified schemes to internal controls.
The potential impact of fraud on your organization is directly related to both response time and the manner in which you respond. A slow response, or incorrect decisions, can greatly increase the financial and reputational damage to your organization. The fraud response plan delineates how an organization responds when a fraud occurs. It outlines the hierarchy and chain of authority, and establishes employee responsibilities and proper reporting channels. The nagel + associates team can assist clients in the development of a crisis response plan, which includes:
- Investigating the incident through specific and pre-determined steps when fraud allegations surface
- Determining the protocol to identify and properly secure potential sources of evidence until investigators arrive (to mitigate contamination or destruction)
- Establishing the procedures to prevent any further loss in the immediate future
- Setting out the internal and external lines and chain of communication that must occur;
- Ensuring contact information for the people who need to be involved in the initial response is readily available
- Creating a roadmap to ensure processes are strengthened to prevent the recurrence of a fraud
The aforementioned benefits of a crisis response plan safeguard your organization and ensure that a consistent and thorough approach is taken when dealing with reported incidences of fraud. The fraud response plan effectively mitigates losses and increases the likelihood of a successful investigation.
The nagel + associates team of professionals has been retained in several cases where initially, management teams responded in an impulsive and erroneous manner by reviewing electronic devices prior to them being properly secured and imaged. As a result, key evidence was unfortunately compromised. Having the knowledge to distinguish between proper and improper action is critical to the success or failure of an investigation, and is often considered to be a determining factor in the outcome of many cases.