Investigations today

The combination of utilizing internal and external sources in investigations represents a powerful strategy for uncovering facts and achieving more robust outcomes. While internal sources provide firsthand information and perspectives, external sources offer broader context, independent verification and supplementary evidence. The synergy between these sources enhances the effectiveness, reliability and credibility of investigations. By embracing this integrated approach, investigators can navigate the complexities of today's challenges, ensuring a comprehensive understanding of the situation at hand.

In a rapidly evolving world characterized by increasing volumes of data, complex business arrangements and ever-changing legislation, the process of uncovering facts and gathering evidence requires a multifaceted approach. Successful investigators understand the significance of harnessing both internal sources and external intelligence to shed light on complex matters, thereby yielding more comprehensive and reliable results. Whether the investigation is performed by in-house personnel or conducted via outside resources, such as external counsel or forensic accountants, reliance on a variety of sources, information and technology solutions is imperative. 

Sources gathered internally

Information obtained internally plays a pivotal role in investigations by providing valuable insights derived from an entity's books and records, supporting documentation, data, email correspondence, systems and human resources. The deployment of specialized forensic accounting skills is often a key element of effective investigations teams, which can be leveraged to analyze data and documentation to unearth financial irregularities, fraud and other discrepancies. By meticulously scrutinizing financial transactions, tracing money flows and examining financial statements, accounting data and supporting documents, forensic accountants can identify patterns indicative of illicit activities.

Interviews with key individuals who are involved in or knowledgeable about the situation under investigation are another fundamental component of internal information sources. Investigators will, and should, conduct interviews with employees, managers and other relevant stakeholders to gather firsthand information, insights and perspectives. These interviews can reveal hidden connections, motivations and either validate or challenge the findings derived from other investigative activities. In addition to interviews and discussions, the review of employees’ communications such as emails and written memoranda, as well as instant messaging logs, provide particularly relevant and insightful information.

In connection with instant messaging logs, an often-overlooked resource is a company’s technology systems. Whether it be for internal messaging or for tracking security access and entry or exit times, looking into internal technology may prove useful to understand the potential population of wrongdoers. In other instances, user approval logs or even determining which employees rarely use allotted vacation days may lead an investigator to uncover those attempting to override controls. Lastly, personnel records, contracts, performance reviews and other HR files may shed light on an employee’s historical performance and motives for improper behavior.

However, relying solely on internal sources may limit the scope of an investigation, as they do not consider the full spectrum of available information and could be influenced by internal biases or other limitations.

Sources gathered externally

While internal sources often provide a solid foundation and starting point for investigators, investigations can be further enhanced by integrating external intelligence, which ultimately encompasses a range of information sources beyond those readily available within an organization. One vital external source is business intelligence, a core service offering we provide which involves the systematic collection and analysis of publicly available data (e.g., news, public records and filings, legal proceedings, social media and restriction lists). By examining external factors that may impact the organization, investigators can gain a broader understanding of the context surrounding the alleged misconduct.

Discreet source inquiries, another form of external intelligence, involve holding conversations with informed human sources. These sources can include individuals with insider knowledge of the organization, industry or jurisdiction at issue. The information obtained from discreet source inquiries can provide critical leads, corroborate internal findings or expose hidden agendas.

Holding formal discussions and interviews with external parties provides added value. A conversation with a third-party provider, customer or subcontractor often supplements perspectives and will help round out a set of facts and circumstances. In certain situations, investigations are conducted in coordination with other external stakeholders, including regulatory authorities and outside counsel, or if a need arises to report to independent groups such as audit or special committees of the board.

Intersecting internal sources and external intelligence

Both internal and external sources should inform investigators of the overall investigative scope. By integrating external intelligence sources with data-driven techniques, investigators can enhance their understanding of the context surrounding a case and acquire valuable leads. External intelligence helps bridge gaps in data, identifies patterns and connections that might otherwise go unnoticed and provides real-time updates on emerging trends and threats. For example, results from desktop searches and corporate mapping can be crucial in setting assertive parameters for conducting an effective document review of electronic data, whether done manually or empowered by eDiscovery software.

A case study illustrating intersection in action

Control Risks had the opportunity to support a global manufacturing company with an investigation of an international bribery scheme. The company was notified by its external auditors of unsupported payment activity for a business segment with operations based in São Paulo, Bogotá and Mexico City. The payment activity was indicative of potential fraud, corruption and employee embezzlement. Working in coordination with external counsel, Control Risks deployed local resources to provide support on the ground. 

Our teams performed forensic collections, eDiscovery, data analytics and visualization, forensic accounting and investigative interviews to understand and quantify the pervasiveness of the problematic behavior. Our investigation included the collection and analysis of over two million accounting records from two separate ERP systems, along with targeted transaction testing and examination of various sources and types of supporting documentation such as invoices, bank statements and accounting schedules. The investigation team conducted interviews alongside external counsel to assess employee involvement and gain further insight into the schemes. Control Risks also performed data analytics across the company’s global accounting data to identify activity in other regions with similar indicators as the problematic payments. In addition to the extensive data analytics and forensic accounting procedures, we performed business intelligence and public records research on dozens of suppliers potentially involved in improper activities. The reputational diligence findings unlocked a roadmap to further focus and reinform the forensic accounting review.

As a result of the collaborative effort and information gleaned from both internal sources and external intelligence, Control Risks was able to provide the company with clarity on the extent and volume of improper payments. We delivered evidence of employees and other individuals involved in irregularities and prepared a comprehensive list of internal control observations and areas for improvement for the company’s policies and procedures. 

Contact a Control Risks expert and find out more about our investigative services and capabilities here.

Finding this article useful?

Get in touch

Can our experts help you?