CA Gopal Singh Negi

CA Gopal Singh NegiBackground: –

Fraud Examination & Investigation is very niche area of working for Professional. Every case pose new challenges, thrill & knowledge update.  Fraud Examination & Investigation is chor -police game. With emerging technology fraudster are getting smarter day by day. It requires daily updation.

As per latest report of ACFE (Association of Certified Fraud Examiner) Report to Nation 2016 as under:

  • Typical organization loses 5% of revenues in a given year as a result of fraud.
  • The total loss caused by the cases in our study exceeded $6.3 billion, with an average loss per case of $2.7 million.

5% of Turnover is big loss to any Organisation and Country as well. Fraud Examiner & Investigator are appointed to Prevent and detect these losses to lower level. Fraud Examiner & Investigator use different technique to unearth fraud. (In this article we will be focusing on Legal part). Important technique is Interview. It’s called Core of Fraud Examination.

In India, recently many banks have come out with professional Opportunities for Practicing CA. Like PNB/ SBBJ, SBI empanelment, SFIO Empanelment. Therefore it’s important to know legal aspect and do & Don’ts.


Fraud examination might lead to legal action; therefore its necessary for professional conducting examination should be aware with basic right & freedom provided by constitution and International convention like ICCPR (International Covenant on Civil & political Rights)

  1. Freedom from Improper arrest – arrest will be done in accordance with procedures establish by law ( Arrest Warrant some exception to rule are there)
  2. Right to be informed of Charges: Suspect will be informed for charges brought against him. Charges will be presented in language that suspect can understand.
  3. Right to a fair hearing – opportunity of being heard will be provided
  4. Presumption of Innocence – suspect will be treated as innocence till prove guilty by Court. Fraud examiner can’t comment on guilt & innocence of any party in case. Its against code of ethics of Profession
  5. Right to Appeal: – appeal to higher authority in case not satisfied with judgment.
  6. Right to privacy: – subject will not be target to arbitrary or unlawful interference with privacy, family or home correspondence. Even in offices suspect / employee enjoy reasonable expectation of privacy. It can be lower by agreement but cant be eliminated.
  7. Right to remain silent – subject may opt to remain silent in govt case. However in private case it’s not so. Employer can use threat to fire employee for refusing to answer question.
  8. Right to counsel: lawyer assistance.

Being aware of Right Fraud examiner need to start his / her investigation. Most important part is home work for case in hand. It will make suspect difficult to say no.

Big aspect need to take care in Interview is: FALSE imprisonment.

False imprisonment refers to unlawful restraint by one person of physical liberty of another without consent or legal justification.

Plaintiff need to prove all of following:-

  1. Examiner / Interviewer used word or actions intended to restrain him/her.
  2. It’s without his consent and without legal justification.
  3. He / she was aware that he /she was being restrained.

There no such define rule as to when a false imprisonment occurs, but factors such as length and manner of interview might determine whether liability arises.

Other factors used to determine if an individual has been falsely imprisoned include: –

  1. Locking the door to the interview room
  2. Blocking the exit to the interview room
  3. Conducting an interview in a room with severe lighting
  4. Using violent behaviour.
  5. Conducting an interview in the presence of numerous people.

Conclusion:  Fraud Examination & investigation is prime & growing area for professional opportunities which require taking care legal points and constitutional / International right provide to human. Prime reason is accused can retaliate and file cases for defamation under section 499 of IPC.  Many FBI agent facing cases against them.

(In case of any query and suggestion, please feel free to write at


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