CAE insights for sensitive investigations


Imagine the scenario. You are asked to investigate something that your boss is associated with, that the CEO has done or that could cancel corporate bonuses. How do you react? What do you do? Who do you turn to?

Incorporating experiences from chief audit executives(CAEs), we explore the lessons from a number of sensitive investigations. It is designed to give you practical tips and inspire you to meet your own challenges head on and with your head held high; very relevant for CAEs that need to conduct an investigation, particularly if they haven’t rolled their sleeves up in a while.

To protect our CAEs, their quotes are anonymous. The scenarios they have experienced range from senior level expenses fraud, to bullying, financial misappropriation and corruption; often involving the police and prosecution.

What is a sensitive investigation?

All investigations, and indeed audit findings, have a degree of sensitivity for those involved. A sensitive investigation is normally one that involves senior executive, CEO/accounting officers, non-executive directors and the board with serious reputational damage and consequences, often including criminal charges.

Aside from straightforward situations where an individual commits fraud or accepts a bribe, there are also cases of culpability. Consider an executive signing off on expenses or business cases on ‘trust’, not really challenging content, too busy to get into the detail: a perfect situation for a corrupt individual to abuse that trust and exploit their power. But the executive is accountable, not doing their duty, underperforming.

Events may not be fraud related, they may be cultural, related to policy or ethics. Individuals may abuse a weak control environment to further personal motives, such as hobbies, lifestyle or fantasies; for example manipulating schedules to avoid being at home. Financial gain does not have to be the motivation for deceitful practices.

There is…