What is the primary purpose of a fraud investigation by internal audit?

The primary purpose of a fraud investigation by internal audit is to detect and mitigate fraudulent activities within the credit union. Internal auditors are tasked with identifying potential fraud schemes, assessing the effectiveness of controls designed to prevent fraud, and ensuring that any detected instances of fraud are addressed appropriately. Effective fraud investigations involve analyzing financial records, interviewing staff, and reviewing processes to understand how fraud may have occurred and how similar incidents can be prevented in the future.

This focus supports the credit union's integrity and financial health, ensuring that members' trust is maintained and that the organization operates within legal and ethical guidelines. By concentrating on the detection and mitigation of fraud, internal audits encourage a culture of accountability and transparency, which is essential for enhanced operational effectiveness and member confidence.