internal investigation

The warning signs for internal investigation may come from many sources. It may come from a tip from an employee, complains from customers and vendors, and troubling facts that were identified in financial analysis and audit.

The purpose of internal investigation is not only to resolve the issues quickly and efficiently but also to make investigation work to maximum advantages of the company as a whole. Thus, properly planned and conducted an internal investigation can reveal much more than WHO, WHAT WHEN, WHERE, WHY and HOW? It also can help to strengthen the business in the future.

Step taken for internal investigation:

  1. Setting up goals
  2. Choosing the players
  3. Managing the processes
  4. Conducting the investigation
  5. Final report and disclosures
  6. Maximize the results


  1. Setting up goals – immediate goal for internal investigation is to ensure the crime has occurred and the causes of irregularities that will be affected the business operation. If the criminal activity is suspected, we will want to know who was involved, how it was perpetrated and why it happened. We also have to identify whether the results of the investigation will be disclosed to outside parties or kept in the confidence of a few select. It also the decision to terminate the parties involved or whether to prosecute individuals in civil or criminal court.
  2. Choosing the players– The decision as to who should be responsible to conduct the investigation requires weighted a host of considerations. Using own people can be quite tempting as they have better understanding of company’s history, structures, contracts, procedure, and operations. However, outside professionals are more objective in assessing and questioning practices.
  3. Managing the processes– Who should control the investigation? If you place it in management’s hand, then it considered independent. So, the best choice is to create a special committee of independent directors and to each member should possess high moral standards, business experiences, financial acumen, and good reputations.
  4. Conducting the investigation– The more experienced the team members, the more likely they will be able to identify pertinent information. The team can perform physical examination, conducting interview with staff, vendors, analysis accounting and financial data and, etc.
  5. Final report and disclosures– The written report should contain all the detail findings of the investigation, a list of the allegation, all procedures that were followed to assemble the data and presented in clear and precisely report.
  6. Maximize the results– The results of internal investigation never should be viewed merely as an exercise in damage control. The recommendation can include the point that can be used for revising internal controls, compliance to the company policies and procedure, and also providing management and staff with fraud awareness. Finally it also can help to make company more secure, effective, and make more profit in the years ahead.