Fraud is a pretty alarming scenario for any company, whether it be large or small, and it can be particularly alarming when the fraud, or suspected fraud, is internal. A company needs to swiftly handle a suspected fraud situation with finesse and without creating too much fear within the work environment. If other employees get a sense of what is happening, the circumstances can quickly escalate. A delicate navigation of the situation is required, especially when employee and employer reputations are at stake.

In 2014, the Association of Certified Fraud Examiners (ACFE) released a general report on fraud with interesting findings. According to the report, employees are most likely to commit occupational fraud, accounting for 42 percent. Managers are next in line, committing 36 percent of fraud. Finally, owners and executives account for only 19 percent of occupational fraud. But how is this fraud most likely committed? Here’s a tree included in the report:


The report goes on to state that typically an organization will lose “5 percent of revenues each year to fraud,” and the majority of frauds aren’t detected for about eighteen months after commencing. Take a look at median fraud by employee level:

median loss

In the case of a large company, 18 months is a long time, allowing for an enormous amount of potential evidence to accumulate, not to mention possible relevant information that existed prior to the fraud commencing.  In order to best sort through data and documents, internal investigation software is quite useful—especially when you are trying to mitigate the situation as quickly as possible.

Internal Investigation Software

Internal investigation software isn’t just for navigating a tricky and potentially expensive situation, it also is a preventative measure to put in place. If data and documents are already sorted and categorized ahead of time, the legal department is able to respond as fast as possible to the case of internal fraud. While being able to find targeted data in the easiest possible way, internal investigation software also helps to prevent expensive litigation. If the software is sifting and sorting, a pricey lawyer is not. This kind of software takes care of the tedious work and improves your company’s internal investigation process.

Internal Occupational Fraud

In the case of internal occupational fraud, corrective action is almost always necessary, given that most losses due to fraud are not minor. The ACFE report mentions that, “it takes time and effort to recover the money stolen by perpetrators, and many organizations are never able to fully do so.” However, if your company has an internal investigation system already in place at the time that the fraud is discovered, your company stands a much better chance of recovering lost profits.

In the end, mitigating fraud with internal investigation software is clearly important to your company.  Sherpa Software can help reduce the cost of fraud by helping you search data for suspected evidence, confidentiality breaches or misrepresentations. Conduct your investigations swiftly and effectively by tackling the increasing volumes of electronically stored information natively, defensibly and with full auditing across a variety of electronic data stores.  Contact us today to learn more.