Corporate Compliance

Tip: Types of investigators/consultants to avoid

Compliance Monitor, July 16, 2008

In general, it’s not a good practice to hire the accounting firm serving as the company’s regular auditor to provide consulting services during an internal investigation for three important reasons.
  1. An accounting firm that serves this dual role is most likely ethically proscribed from ignoring troubling information they obtain during the internal investigation, thereby compromising the confidentiality of the internal investigation.
  1. A separate accounting firm will likely have a greater appearance of independence and objectivity in the eyes of prosecutors. Although the company’s outside auditor might have a greater familiarity with the company’s financial records, the government may suspect its working relationship with the company’s accounting and financial departments will compromise its objectivity.
  1. The investigation may concern financial records the company’s auditors reviewed in a prior audit. If this is the case, questions may arise regarding why the auditor did nor catch problematic inconsistencies and anomalies. Such tension will hamper the progress of the investigation.
This tip was adapted from the Internal Investigations Handbook. For more information about this book or to order your copy, click here.

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