,FOR2607 Assignment 2 (COMPLETE ANSWERS)
Semester 1 2025 (629888) - DUE 21 April 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
Case study
Fraud and corruption in the Public Service will always be problematic, counter-
productive, and devastating, especially in young democracies and developing
countries. Although government introduced and continues to add various forms of
controls, the persistence of criminals continuously challenges these controls for
self-enrichment. To prevent and detect fraud and corruption in the Public Service,
lifestyle audits are a critical and legitimate management tool and forms part of a
department’s system of risk management. Fraud and corruption are usually
committed by means of ―off book‖ transactions, typically the acceptance of a
bribe, or by manipulating records, especially those involving tenders and
procurement. These ―‖off book‖ transactions are very difficult to detect and
dishonestly inclined professionals are able to conceal their fraudulent actions with
disturbing alacrity and ease, particular in work environments with weak controls or
limited segregation of duty. Sometimes the only clue to these illicit activities is a
sudden unexplained change in an employee’s lifestyle. (Guidelines of conduct
lifestyle audit (2001)
Question 1
Explain in your own words, what is the “Financial investigation.”
Please support your answer with three sources. (05)
A financial investigation is a systematic examination and analysis of
financial records, transactions, and assets to detect and trace illegal or
suspicious financial activities, such as fraud, corruption, money
laundering, or theft. Its purpose is to uncover the origin, movement, and
destination of illicit funds, particularly in cases where individuals or
entities attempt to conceal their gains. These investigations are often
used in criminal cases, particularly where assets have been illegally
acquired or misused.
, In the context of the Public Service, financial investigations are essential
to trace and expose corrupt practices such as bribery, procurement fraud,
or embezzlement. For instance, if a government official suddenly
displays wealth beyond their official income, a financial investigation
can help determine whether the source of that wealth is lawful.
Key Elements of Financial Investigation:
1. Tracing Assets – Locating and identifying the financial and
physical assets of a suspect.
2. Following the Money – Understanding the movement of funds to
and from individuals or companies.
3. Analyzing Financial Records – Scrutinizing documents such as
bank statements, contracts, invoices, and tax returns to identify
discrepancies or illegal transactions.
Supporting Sources:
1. Financial Action Task Force (FATF) – Describes financial
investigations as ―an investigative process that looks into the
financial aspects of criminal activity to follow the money trail and
gather evidence of the proceeds of crime.‖
(Source: FATF, “Best Practices Paper on Investigations and
Prosecutions of Proceeds of Corruption”, 2012)
2. Interpol – States that financial investigations "play a crucial role
in identifying, disrupting and dismantling the financial
infrastructure of criminal organizations."
(Source: Interpol, Financial Crime and Anti-Corruption section)
3. UNODC (United Nations Office on Drugs and Crime) – Defines
it as ―the investigation of financial transactions to uncover criminal
activity, especially corruption and money laundering.‖
(Source: UNODC, Toolkit for the Investigation and Prosecution of
Economic and Financial Crimes).
Semester 1 2025 (629888) - DUE 21 April 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
Case study
Fraud and corruption in the Public Service will always be problematic, counter-
productive, and devastating, especially in young democracies and developing
countries. Although government introduced and continues to add various forms of
controls, the persistence of criminals continuously challenges these controls for
self-enrichment. To prevent and detect fraud and corruption in the Public Service,
lifestyle audits are a critical and legitimate management tool and forms part of a
department’s system of risk management. Fraud and corruption are usually
committed by means of ―off book‖ transactions, typically the acceptance of a
bribe, or by manipulating records, especially those involving tenders and
procurement. These ―‖off book‖ transactions are very difficult to detect and
dishonestly inclined professionals are able to conceal their fraudulent actions with
disturbing alacrity and ease, particular in work environments with weak controls or
limited segregation of duty. Sometimes the only clue to these illicit activities is a
sudden unexplained change in an employee’s lifestyle. (Guidelines of conduct
lifestyle audit (2001)
Question 1
Explain in your own words, what is the “Financial investigation.”
Please support your answer with three sources. (05)
A financial investigation is a systematic examination and analysis of
financial records, transactions, and assets to detect and trace illegal or
suspicious financial activities, such as fraud, corruption, money
laundering, or theft. Its purpose is to uncover the origin, movement, and
destination of illicit funds, particularly in cases where individuals or
entities attempt to conceal their gains. These investigations are often
used in criminal cases, particularly where assets have been illegally
acquired or misused.
, In the context of the Public Service, financial investigations are essential
to trace and expose corrupt practices such as bribery, procurement fraud,
or embezzlement. For instance, if a government official suddenly
displays wealth beyond their official income, a financial investigation
can help determine whether the source of that wealth is lawful.
Key Elements of Financial Investigation:
1. Tracing Assets – Locating and identifying the financial and
physical assets of a suspect.
2. Following the Money – Understanding the movement of funds to
and from individuals or companies.
3. Analyzing Financial Records – Scrutinizing documents such as
bank statements, contracts, invoices, and tax returns to identify
discrepancies or illegal transactions.
Supporting Sources:
1. Financial Action Task Force (FATF) – Describes financial
investigations as ―an investigative process that looks into the
financial aspects of criminal activity to follow the money trail and
gather evidence of the proceeds of crime.‖
(Source: FATF, “Best Practices Paper on Investigations and
Prosecutions of Proceeds of Corruption”, 2012)
2. Interpol – States that financial investigations "play a crucial role
in identifying, disrupting and dismantling the financial
infrastructure of criminal organizations."
(Source: Interpol, Financial Crime and Anti-Corruption section)
3. UNODC (United Nations Office on Drugs and Crime) – Defines
it as ―the investigation of financial transactions to uncover criminal
activity, especially corruption and money laundering.‖
(Source: UNODC, Toolkit for the Investigation and Prosecution of
Economic and Financial Crimes).
