5 Steps To Investigating Fidelity Claims

Rehana MoosaBy Rehana Moosa

Published in the November 2012 edition of Insurance West Magazine

Fidelity losses are difficult to investigate because frauds can be complex and hard to detect. Here are 5 steps to keep in mind when reviewing fidelity claims. They will help you review the claims quickly and help minimize the impact on the insured.

  1. Understand business and accounting system
    Identify who performs the accounting duties and the documents generated by the accounting system (invoices, receipts). Walk through sample transactions and document how they are recorded, procedures followed and documents supporting the transaction. Compare normal accounting processes to those used in the suspicious transactions to confirm fraud.
  2. Understand how the fraud was detected
    Start with the transaction that uncovered the fraud. This will help you understand how the fraud was committed and identify patterns (amounts, times, accounts). Suspicious transactions can be compared to the pattern to identify fraudulent entries.
  3. Identify internal controls
    Internal controls are the processes and procedures designed to prevent, detect and correct errors and fraud. Examples include management approval of purchases and keeping cash in a locked area. Compare how the internal controls should operate to the way they functioned at the time of the fraud to help you understand how the fraud was committed.
  4. Identify repayments made
    Ask the insured if any funds have been repaid. Some fraudsters will confess in writing and refer to repayments. Review correspondence from the employee to determine if restitution has been made. These repayments will reduce the claim and are often overlooked by the insured.
  5. Talk to people
    The Association of Certified Fraud Examiners’ 2008 Report to the Nation on Occupational Fraud and Abuse states that employee frauds are most likely to be detected through a tip. Interview anyone who may have knowledge of the fraud (business owners, managers, co-workers).

Contact us to learn more.   647-426-0146  |

Communications are intended for informational purposes only and do not constitute legal advice or an opinion on any issue. For permission to republish this content, please contact Rehana Moosa Forensic Accounting Professional Corporation.

Back to Knowledge

Related Knowledge

Conducting an Internal Fraud Investigation

In a previous blog post, we discussed what to do when you first suspect that a fraud has occurred within…read more

The Capital Asset Approach To Calculating Damages

Canadian courts have typically adopted one of two categories in quantifying financial losses due to bodily…read more

Factoring In Plaintiff’s Age And Occupation To The Earnings Curve

Jane is a 59-year-old real estate lawyer who was injured in a car accident. She will be unable to continue…read more

What To Look For In A Fidelity / Crime Insurance Policy

Imagine you are a business that uses independent contractors to provide services to your clients instead…read more

Identifying Fraudulent Transactions

When businesses prepare a fidelity / crime insurance claim, much analysis is required to ensure that…read more


The RMFA Difference

Regardless of background or level of knowledge, all our clients are treated with professionalism and respect. All files, regardless of size or complexity, are treated as a top priority. That’s our promise.