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The Aftermath of Fraud: Faculty’s Article Published in ICPAK’s the Accountant

Faculty Lecturer and Academic Director (Ag.) – MSc. Development Finance David Mathuva co-authored an article with Mr. Kennedy Waituika titled The Aftermath of Fraud. The article, that was published on The Accountant – a journal of the Institute of Certified Public Accountants of Kenya, discusses the importance of understanding roles, mandates and objectives of law enforcement agencies, as well as advice on how to file for charges after a fraud.

 

You have just unearthed that “major” fraud in your organization. You now want to establish the underlying cause of the fraud and how you can recover the lost assets. Question is: how do you involve the relevant law enforcement agencies, the criminal justice system and then ‘move on’? What do you need to consider before engaging the law enforcement agencies? Forensic investigators or internal auditors may be required to work with law enforcement agencies at some point of their career.


Law enforcement agencies could include the following: The local police, Criminal Investigations Department (CID), Ethics and Anti-Corruption Commission (EACC) or Central Bank Investigative units. Law enforcement agencies may not be limited to local agencies but could include agencies from other countries such as the Federal Bureau of Investigation (FBI), the New Scotland Yard among others. This may happen when the matters involved cover more than one jurisdiction or in cases where foreign laws apply. For example if a listed American company is involved in bribery or corruption allegations in Kenya, an investigator could end up dealing with the Kenya police, the EACC, the Securities and Exchange commission investigators and the FBI, just to mention but a few.


An understanding of how law enforcement agencies operate and their objectives is important for any investigator or auditor. In most cases, law enforcement agencies have wide experience in handling court proceedings and complex criminal cases, while forensic accountants have the technical skills required to understand technical accounting and financial issues. It is therefore important and advisable that by working together, the objective should be to realize the synergies of the two teams working together.


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