What are some of the common mistakes that organizations make with respect to fraud investigations?
Hersh: The most common mistake is that companies fail to retain counsel when fraud is uncovered. This is needed to protect the attorney/client privilege with respect to the internal investigation and to provide legal advice about how to proceed against the employee. Even employees who commit fraudulent acts have legal rights that are often violated by organizations who react quickly to investigate or discharge that employee. These organizations find themselves in lawsuits for wrongful termination or violation of worker privacy when they act without proper legal advice. Other common mistakes are not engaging the services of independent fraud investigators or a data forensics team. In our experience organizations will begin by conducting internal investigations and by retaining their external accountants. The external accountant may not be experienced in performing fraud investigations and may have a conflict of interest because he or she is already involved in the preparation, review or
