ACFE Course Materials - Fraud Conference

1 Conducting Internal Investigations: Planning and LogisticsWelcome!The ACFE would like to welcome you to Conducting Internal Investigations: Planning and Logistics. We hope you will find this Course informative and immediately useful. The Materials in this book will not only supplement your learning experience during the class, but will also serve as a reference and reminder for you when you are back on the job. There are a few important administrative items to keep in mind: Timing and Structure Class will start promptly at 1:00 and end at 5:00 each day.

2 Beverages, continental breakfast, and one group lunch will be provided. Sign-In Sheet Please initial next to your name on the Sign-In Sheet. It is critical that you do so each morning to be eligible for CPE credit. Certificate of Attendance Please complete the CPE Reporting Form found inside your registration packet. This form is due on the last day of the seminar and will serve as your Certificate of Attendance. Return the top white copy to the Registration Desk and keep the bottom yellow copy for your records. The yellow copy will serve as your Certificate of Attendance.

3 Evaluations Course evaluations will be distributed by email. Please take time to provide feedback about the Course , venue, and instructor. Your evaluation will help the ACFE make improvements to future training courses. At the conclusion of the evaluation you will receive a link to all the PowerPoint slides used throughout the you for attending. Please let us know if there is anything we can do to make your experience in this class more comfortable, productive, and Course Materials 2012 by the Association of Certified Fraud Examiners, Inc.

4 Revised 5/21/12 No portion of this work may be reproduced or transmitted in any form or by any means electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system without the written permission of the Association of Certified Fraud Examiners, Inc. Association of Certified Fraud Examiners, Certified Fraud Examiner, CFE, ACFE, Fraud Magazine, CFE Exam prep Course , EthicsLine, the ACFE Seal, and the ACFE Logo are trademarks owned by the Association of Certified Fraud Examiners, Inc. WORLD HEADQUARTERS, THE GREGOR BUILDING 716 WEST AVENUE AUSTIN, TX 78701-2727 USA TEL: (800) 245-3321 +1 (512) 478-9000 FAX: +1 (512) 478-9297 DISCLAIMER Every effort has been made to ensure that the contents of this publication are accurate and free from error.

5 However, it is possible that errors exist, both typographical and in content. Therefore, the information provided herein should be used only as a guide and not as the only source of reference. The author, advisors, and publishers shall have neither liability nor responsibility to any person or entity with respect to any loss, damage, or injury caused or alleged to be caused directly or indirectly by any information contained in or omitted from this publication. Printed in the United States of America. Association of Certified Fraud Examiners 23RD ANNUAL ACFE Fraud PRE- Conference CONDUCTING INTERNAL INVESTIGATIONS: PLANNING AND LOGISTICS JUNE 17, 2012 ORLANDO, FL 11:00 1:00 Registration: City Hall Lobby Room Name: Sun Ballroom A 1:00 2:10 Responding to the Allegations: The First 24 Hours 2:10 2:25 Break 2:25 3:35 Building the Fraud Examination Team 3:35 3:50 Break 3:50 5.

6 00 Project Management and Fraud Examinations Leah Lane, CFE Global Investigations Manager Texas Instruments, Inc. Leah Lane has more than 20 years of combined public and private sector investigations and Fraud examination experience. During her career, she has managed, worked, and assisted in hundreds of investigations globally, involving allegations of Foreign Corrupt Practices Act violations, internal and external Fraud , and employee misconduct. Leah is currently the Global Investigations Manager at Texas Instruments, Inc, where she manages a group of investigators with global responsibility for investigations within TI.

7 She is also responsible for Fraud awareness campaigns. Before joining Texas Instruments, Leah served as the Audit Fraud Manager at jcpenney and as a Security Manager for the Americas at HP/EDS. At these positions, she was responsible for investigating and managing complex financial Fraud and computer forensic matters. She began her investigative career as a special agent in the Customs Service, a position she held for more than seven years. Leah is a Certified Fraud Examiner (CFE) and a Certified Fraud Specialist (CFS), and holds a BS in Criminal Justice from the University of Southwestern Louisiana.

8 She is an active member of the Association of Certified Fraud Examiners, the Association of Certified Fraud Specialists,and The Institute of Internal Auditors. Leah also serves on the ACFE Advisory Council. TABLE OF CONTENTS Conducting Internal Investigations: Planning and Logistics 2012 i PRACTICAL PROBLEMS Practical Problems 1 3 .. PP-1 RESPONDING TO THE ALLEGATIONS: THE FIRST 24 HOURS Introduction ..1 What to Do When an Allegation of Fraud Arises ..1 Avoid Tipping Off the Fraudster ..10 Identify the Investigation Leader ..11 Contact the BUILDING THE Fraud EXAMINATION TEAM Introduction.

9 15 Structure the Investigation Team to Preserve Confidentiality ..15 Identify What Skills Are Needed to Conduct the Investigation ..18 Internal Versus External Expertise ..19 Select the Team ..20 Do s and Don ts for Selecting Team Members ..25 Allocate Necessary Resources ..26 Managing the Fraud Examination Team ..27 PROJECT MANAGEMENT AND Fraud EXAMINATIONS Introduction ..31 Outlining the Course of Action ..31 Identifying Phases, Tasks, and Checkpoints ..33 Planning the Dealing with Underperforming Team Members ..42 Keeping Your Team Informed and on Task.

10 46 Monitoring the Progress of the Managing Conflicting Resources and Demands for Time ..50 PRACTICAL PROBLEM 1 Conducting Internal Investigations: Planning and Logistics 2012 PP-1 You are a CFE working for Obsidian Industries, a company that makes industrial-size fans. Obsidian Industries receives a call through its Fraud hotline stating that it should take a close look at Steven Browning. The caller says Browning is giving favorable treatment to, and possibly receiving favorable treatment from, Copius Copper, a vendor that sells copper wiring to Obsidian.