Solving employee theft cases: during investigations, co-workers often provide the best clues as to who is stealing from the company

WHEN IT COMES TO UNCOVERING the perpetrator of an employee theft, the best sources of information often are the people who work together and see one another day after day in all types of situations. Over time, they learn what constitutes "normal" behavior in co-workers and can spot abnormal behavior within minutes. So when a theft occurs, employees are often privy to impressions as well as information about others on staff that no background investigation could ever reveal. The key for the investigator is to show the thief's co-workers why it is in their best interest to share what they know; most often, they will help catch the thief.

Although some internal auditors are responsible for investigating fraud, many times trained investigators are used. In either case, knowing how employees react during an investigation can help auditors in their reviews of soft controls like integrity, ethics, and management style.

THE RELUCTANT INFORMANT

The first step toward getting employees to confide which of their co-workers they think committed a theft, is for investigators to genuinely believe they are entitled to the information. The second step--and the most important--is to make the employees understand why revealing the information is good for them. Coercing employees to tell what they do not want to tell only succeeds on television.

Over time, all investigators learn that it's the innocent suspects who are most eager to see the case solved. Logically, they should bend over backward to tell the investigator everything they can about who might have committed the theft; however, there are several reasons why they don't.

Employees know that by providing information to investigators, they may be labeled as "rats," "snitches," or "squealers." Investigators must explain to employees that providing information is noble and right, that the employee is not a "snitch" but rather a hero to his or her employer and co-workers. Also, employees need to know that the thief is certainly not a friend to the honest employee; a real friend doesn't put co-workers under unnecessary stress by making them suspects in a theft investigation; a real friend doesn't put co-workers' jobs in jeopardy or wreak havoc on the company's bottom line.

Another reason employees are reluctant to provide information about the perpetrator is fear of reprisal. The thief may be in a position to terminate the employee or otherwise make his or her professional Fife miserable. Additionally, there could be reprisal from management in the form of questions such as: "If you knew who stole these rings, why didn't you tell me before?" or...