When control leads to discovery – a practical example of a fraud investigation

Internal auditing encounters many facets of organisational realities: ambiguities, gaps in documentation, process errors – and sometimes even concrete initial suspicions of fraud. In such cases, the audit function is more than just an observer – it becomes a key player in limiting damage and making responsibilities transparent.

‘Revision does not mean mistrust – but looking closely when necessary.’– Florian Habel

Initial suspicion – e.g. when individual receipts raise questions

Not every case of fraud begins with an anonymous tip. Often, it is something seemingly minor: implausible bookings, unusual price developments, discrepancies between orders and deliveries, recurring payments to the same supplier without any discernible proof of service.

‘In one case I was involved in, it was a small piece of evidence that caused a big stir.’

Services were simply not provided, suppliers existed only on paper, but not in reality.

Investigation and test design – structured and discreet

As soon as initial suspicions are confirmed, the actual audit work begins – systematically, documented and independently.

Typical audit steps in suspicious cases:

• Delimitation of the audit period

• Securing and analysing relevant data and documents

• Interviews with key persons (discreet, neutral)

• Plausibility checks and cross-checks, often on site

• Inspection of e.g. company locations

• Preparation of a legally compliant audit report

‘In such cases, it is important to keep a cool head – and to document clearly what you see.’

Consequences and recommendations – the added value of the revision

The aim is not to point fingers, but to expose structures that enable manipulation – and to make recommendations on how these gaps can be closed.

Typical recommendations following such audits:

• Introduction of a random audit procedure that supplements the usual dual control principles for order placement and invoice approval

• Automated accounting audits with key figure comparison

• Adjustment of purchasing guidelines and internal control systems

• Training employees in typical indicators of fraud

Conclusion: Auditing protects – if it is taken seriously

A well-designed auditing system not only identifies risks, but also helps to ensure organisational integrity. Cases of fraud are unpleasant – but they also offer an opportunity to rethink structures and regain trust.

‘A detected case of fraud is not a blemish – it is proof that the system works.’– Florian Habel

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