Fraud in the business and financial world can cause huge losses — both financially and reputationally. In an era where transparency and corporate governance are a priority, fraud investigation is present as an important element in maintaining organizational integrity.
For financial services institutions, the anti-fraud strategy and its reporting obligations to OJK are discussed in the article anti-fraud strategy under OJK Regulation 12/2024.
Through a systematic investigation process, a fraud investigator helps uncover fraud, gather evidence, and provide recommendations to prevent similar incidents in the future.
What Is Fraud Investigation?
Fraud investigation is an investigation of suspected fraud to determine whether fraud actually occurred, who was involved, how it was carried out, and how much was lost, and to provide evidence for legal or disciplinary action. It is carried out when there are indications of violations such as financial statement manipulation, asset misappropriation, or abuse of authority.
The main objectives are:
- Identify whether there is fraud.
- Specify the performer and the mode used.
- Measure the impact of financial or reputational loss.
- Provide valid evidence for legal or disciplinary action.
According to ACFE Indonesia, an investigation is carried out by internal auditors, investigators, or other assigned parties, requires special expertise, and differs fundamentally from an audit.
An investigator is a person tasked with finding facts and evidence about an event. A fraud investigator focuses that task on suspected fraud within an organization, which differs from inquiry officers and investigators who are law enforcement officials.
What Is the Difference Between Fraud Investigation, Investigative Audit, and Forensic Audit?
An investigative audit, also called an audit investigatif, is an audit carried out to uncover whether irregularities or fraud occurred (BPKP). Fraud investigation is the broader process of investigating suspected fraud, covering evidence preservation, interviews, and reporting. A forensic audit generally emphasizes supporting evidence for legal proceedings. The boundaries between the three vary between institutions and literature.
See also:
- What Is An Investigative Audit? Definition, technique and purpose
- What is audit Fraud? Definition, types of fraud, and Prevention
- Forensic Audit is: Definition, 5 Functions, and Stages
What Is the Regulatory Basis for Fraud Investigation in Indonesia?
For financial services institutions, OJK Regulation Number 12 of 2024 on the Implementation of Anti-Fraud Strategy for Financial Services Institutions requires an anti-fraud strategy with four pillars: prevention; detection; investigation, reporting, and sanctions; and monitoring, evaluation, and follow-up. Investigation sits in the third pillar.
The regulation lists these types of fraudulent acts: corruption, asset misappropriation, financial statement fraud, deception, disclosure of confidential information, and other acts comparable to fraud. Its obligations apply only to financial services institutions. For other companies, the framework can serve as a good practice reference.
To understand the meaning of fraud, its types according to ACFE, and how it differs from deception and corruption under the new Criminal Code, also read the article what is fraud.
What Types of Fraud Are Commonly Found?
According to the fraud tree of the Association of Certified Fraud Examiners (ACFE), occupational fraud falls into three main categories:
1. Asset Misappropriation
Fraud involving theft of a company's cash, inventory, or fixed assets.
2. Financial Statement Fraud
Falsification or manipulation of financial statements to make the company's performance appear better than reality.
3. Corruption and Bribery
Acts of bribery, gratification, or conflict of interest committed for personal or group gain.
What About Cyber Fraud?
Digital fraud such as hacking, falsifying online transactions, or stealing a company's financial data is not a separate category in the fraud tree. It is a method that can appear in all three categories above.
The 2025 Indonesia Fraud Survey by ACFE Indonesia Chapter recorded corruption as the most common type of fraud in Indonesia (47.6%), followed by asset misappropriation (40.2%) and financial statement fraud (12.2%).
See also: What is the Fraud Triangle and how to identify it
What Triggers a Fraud Investigation?
An investigation starts from indications, among them:
- a whistleblowing report from an employee or outside party;
- an internal or external audit finding; and
- data analysis results that show unusual patterns.
Before an investigation starts, there must be a predication, meaning a sufficient basis of indications. BPKP places initial predication and the formulation of fraud hypotheses in the initial information development stage. The 2025 Indonesia Fraud Survey recorded that 53.24% of fraud was uncovered through reports or a whistleblower system, which makes whistleblower reports the most frequent trigger.
What Are the Stages of a Fraud Investigation Process?
There is no single standard. The general stages below are summarized from BPKP and ACFE Indonesia materials, plus common practice in preserving evidence.
| Stage | Main content | Output |
|---|---|---|
| 1. Receiving the report and assessing predication | Reviewing the report or finding and assessing whether the indications are sufficient | A decision to proceed or not |
| 2. Securing evidence and confidentiality | Securing documents and data, recording findings, and restricting access for the suspected party | Preserved initial evidence |
| 3. Planning | Formulating the hypothesis, scope, team, and legal aspects | An investigation plan |
| 4. Gathering and analyzing evidence | Gathering documents, transactions, and digital logs, then analyzing them | Analyzed evidence |
| 5. Investigative interviews | Planning and conducting interviews, then evaluating the results | Documented statements |
| 6. Reporting | Preparing an objective report with findings, losses, and recommendations, and reporting to the authorities in line with policy | The investigation report |
| 7. Follow-up | Applying sanctions and fixing weak controls | Control improvements |
An investigation must comply with the law, including privacy and employment provisions, so the legal function should be involved from the start. This explanation is not legal advice.
See also:
- Audit Evidence: Definition, Types, Characteristics, and Examples
- Audit Finding Follow-Up: Causes of Overlooked Issues and Their Solutions
What Are the Duties and Role of a Fraud Investigator?
Fraud investigators play an important role in uncovering fraud cases through an investigative and analytical approach. Here are the main tasks and responsibilities:
- Identify early signs of fraud.
Perform data analysis and observation of irregularities in transactions or financial statements. - Conduct in-depth investigations.
Collect physical, digital, and supporting evidence. - Conduct interviews and clarifications.
Interact with employees, management, or external parties related to the case. - Prepare reports on the results of investigations.
Present the findings objectively and provide recommendations for corrective action. - Provide anti-fraud training.
Educate internal teams to be more aware of the risk of fraud in the future.
Key skills required
- Analytical skills and critical thinking.
- In-depth knowledge of accounting and financial systems.
- Understanding of law and professional ethics.
- Domination digital forensics and data analysis tools.
What Are the Qualifications and Certifications of a Fraud Investigator?
To become a professional fraud investigator, one generally has an educational background in accounting, law, finance, or criminology.
Some certifications that are highly valued in the professional world include:
- CFE (Certified Fraud Examiner), issued by the ACFE.
- Supporting certifications such as the CIA (Certified Internal Auditor) and CPA (Certified Public Accountant), which are general audit or accounting credentials.
According to the ACFE website, CFE candidates must be ACFE Associate Members, meet at least 40 points to sit the exam and 50 points for certification, and have at least two years of professional experience related to fraud detection or prevention at the time of certification. The exam has three sections: Fraud Schemes and Financial Crimes (120 questions), Fraud Investigations and Legal Issues (120 questions), and Fraud Prevention and Deterrence (70 questions). Check the latest requirements on the ACFE website before registering.
This certification attests to technical ability, ethics, and competence in handling fraud investigations in a professional manner.
How Much Does a Fraud Investigator Earn?
We have not found an official source with a salary range for fraud investigators in Indonesia, so this article does not state any figures. Job ads on job portals are the closest guide, but some do not state pay and the ranges differ widely between companies.
Factors affecting salary
- Certification and work experience.
- The complexity of the case and the type of Industry (Banking, state-owned enterprises, energy, technology).
- Work area and occupational risk.
Why Is Fraud Investigation Important in Corporate Governance?
Fraud investigation is not only to detect fraudsters, but also part of a healthy corporate governance system.
The strategic benefits include:
- Increase investor and public confidence.
- Reduce legal risks and regulatory sanctions.
- Strengthen the internal control system (internal control).
- Encourage a transparent and ethical work culture.
See also: What is audit Fraud? Definition, types of fraud, and Prevention
FAQ About Fraud Investigation
What is a fraud investigation?
Fraud investigation is an investigation of suspected fraud to determine whether fraud occurred, who was involved, how it was carried out, and how much was lost, and to provide evidence for legal or disciplinary action.
What is the difference between fraud investigation, investigative audit, and forensic audit?
An investigative audit is an audit to uncover whether irregularities or fraud occurred. Fraud investigation is broader, covering evidence preservation, interviews, and reporting. A forensic audit generally emphasizes supporting evidence for legal proceedings. The boundaries vary between institutions.
What are the types of fraud according to the ACFE?
Three main categories in the fraud tree: corruption, asset misappropriation, and financial statement fraud. Cyber fraud is a method that can appear in all three.
What are the duties of a fraud investigator?
Identifying early signs of fraud through data analysis, conducting in-depth investigations by collecting physical, digital, and documentary evidence, holding interviews and clarifications, preparing investigation reports with corrective recommendations, and providing anti-fraud training for internal teams.
Sertifikasi apa yang dibutuhkan fraud investigator?
Generally a background in accounting, law, finance, or criminology. The credential specific to this field is the CFE (Certified Fraud Examiner) from the ACFE. The CIA and CPA are supporting certifications. We did not find a government licensing requirement for this profession.
Bagaimana tahapan proses fraud investigation?
Seven general stages: receiving the report and assessing predication, securing evidence and confidentiality, planning, gathering and analyzing evidence, investigative interviews, reporting, and follow-up.
What is predication in a fraud investigation?
Predication is a sufficient basis of indications before an investigation begins. BPKP places initial predication and the formulation of fraud hypotheses in the initial information development stage.
What is the difference between an investigator and a law enforcement investigator?
A fraud investigator seeks facts and evidence on suspected fraud within an organization. Inquiry officers and investigators (penyelidik and penyidik) are law enforcement officials who work in criminal proceedings.
Conclusion
Fraud investigation plays an important role in maintaining the honesty and accountability of the organization. With proper investigation procedures, companies can identify risks, secure assets, and fix systems that are prone to fraud.
The fraud investigator profession requires precision, high integrity, and strong analytical skills. Amid the rise of financial and digital crime, this role is increasingly relevant to ensure business continuity and reputation.
Conclusion
Audithink is internal audit management software that can be customized. After an investigation ends, teams can use it for audit planning, work program templates, notifications, follow-up monitoring of recommendations, and automated reports. Audithink is not an investigation or legal consulting service. If you are interested, please request a demo.
