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Chapter 4

Fraud response plan

 The fraud response plan sets out the arrangements for dealing with suspected
cases of fraud, theft or corruption.

 It provides procedures for evidence-gathering that will enable decision-making
and that will subsequently be admissible in any legal action.

 The fraud response plan also has a deterrent value and can help to restrict
damage and minimise losses to the organisation.

The organisation's response to fraud may include:

 Internal disciplinary action, in accordance with personnel policies.

 Civil litigation for the recovery of loss.

 Criminal prosecution through the police.

Responsibilities

Within the response plan responsibilities should be allocated to:

 Managers, who should take responsibility for detecting fraud in their area.

 Finance Director, who has overall responsibility for the organisational
response to fraud including the investigation. This role may be delegated to a
fraud officer or internal security officer.

 Personnel (Human Resources Department), who will have responsibility for
disciplinary procedures and issues of employment law and practice.

 Audit committee, who should review the details of all frauds and receive
reports of any significant events.

 Internal auditors, who will most likely have the task of investigating the fraud.

 External auditors, to obtain expertise.

 Legal advisors, in relation to internal disciplinary, civil or criminal responses.

 Public relations, if the fraud is so significantly large that it will come to public
attention.

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