Fraud Investigation Resources

Fraud Investigation Resources

The Inspector General Act of 1978, Section 8 (c)(3), imposes a duty on the Inspector General of the Department of Defense to "provide policy direction for audits and investigations relating to fraud, waste, and abuse."

This guidance and the scenarios with the associated indicators should increase an auditor’s awareness of possible risk factors as well as their responsibilities for audit planning, executing, reporting, and finally, referring the matter to the appropriate investigative organization when an auditor identifies fraud indicators.

The guidance highlights key Generally Accepted Government Auditing Standards (GAGAS) requirements, overall DoD expectations, and best practices. The various scenarios and the accompanying fraud indicators describe situations related to some common fraud schemes that DoD auditors might encounter.

The scenarios are meant to get the auditor thinking about how they might identify or discover certain fraud indicators and under what circumstances they might make a fraud referral. While the scenarios and indicators in this guidance are organized by audit types, many of the fraud indicators described in the scenarios are general in nature or management-related and may be found in any type of audit.

Auditors should familiarize themselves with the basic knowledge provided by the scenarios and creatively use it while performing any audit. This process should also help an auditor link or associate certain fraud indicators with specific audit steps or procedures. When auditors are able to consciously relate fraud indicators or risk factors with an audit step(s) or procedure(s), they should be able to properly plan and execute an audit and adequately document compliance with GAGAS.