The Fraud Examiner

The Importance of Fairness in Fraud Investigations

Gerry McGeachy, CFE      
Graydon McGeachy Law LLP

Many CFEs are drawn to the field of fraud examination and related fields, such as AML and financial crime prevention, out of a strong sense of justice. As professionals, we want to be able to look in the mirror and be proud of what we do; we don’t want to let the “bad guy” get away with it. While those objectives may be noble at heart, approaching an investigation with that mindset can sometimes lead to biases that are unfair. 

Unfair investigations are not only inappropriate and unprofessional — they are also ineffective. Much of fraud examination investigative work is carried out for the purpose of determining whether there has been misconduct, to quantify losses and to identify the perpetrator. No one wants to mistakenly determine that a fraud has occurred when none took place. It is even more important once an irregularity or a form of misconduct has been identified that the process leading to an allegation against a person, group or organization is fair. A lack of fairness in this process will lead to unsafe findings that cannot be relied on and that have negative implications for the accused person, the accusing company and the fraud examiner.

A quick comparison of fairness to various ethical and normative concepts reveals that fairness holds an interesting place among them. It is one of our core human values. However, people fail to honor it regularly, and it is in competition with other important needs and goals. Fairness is a meta-concept. It is not an ethical system itself, but rather a value that is present in some, but not all, systems of law. Similarly, fairness can coincide with and exist comfortably along with other values, even if they sometimes compete, but it is not the same as these. For example, one does not have to be kind or lenient to be fair.

Fairness is important to our role, as it finds practical application in the daily work of ethical investigators. As such, it is important that we spend some time thinking about it. We must remember that if no one accepts the conclusions of our investigation, we will have failed because no one will be deterred.


Common fairness pitfalls

It is widely recognized that people can have difficulty in addressing their own subjective belief system and thought processes. Three of the most widely known and accepted biases are experimenter bias, confirmation bias and appeal to authority.

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