Why ‘No Findings’ Does Not Mean No Fraud

Why “No Findings” Does Not Mean No Fraud.

A forensic report with no findings is often treated as a clean bill of health. In reality, it can be a warning sign.

Fraud does not always announce itself through obvious red flags, missing money, or clear policy breaches.

In many organisations, it is designed to remain invisible, embedded in routine transactions, trusted relationships, and accepted ways of working.

Common reasons fraud goes undetected include:

• Investigations scoped too narrowly
• Over-reliance on documents rather than behaviour
• Conflicts of interest hidden behind approvals
• Poor data quality masking anomalies
• Investigations triggered too late

A “no findings” outcome often means nothing obvious was tested, not that nothing exists.

Effective forensic and probity reviews are not about proving wrongdoing. They are about stress-testing governance, controls, and decision-making to identify exposure before it becomes a crisis.

If you would like to discuss how Duja Consulting approaches forensic investigations beyond surface-level findings, we would welcome a conversation.

How to interpret clean reports, strengthen assurance, and reduce hidden exposure

Introduction

A forensic investigation that concludes with “no findings” is often welcomed as a relief. It is filed away as proof that controls are working, governance is sound, and risk is low. Boards breathe easier, executives move on, and operational teams treat the outcome as closure.

That reaction is understandable, but it can also be dangerously simplistic.

Fraud and serious misconduct are not always visible through standard testing, document review, or a limited sample of transactions. In many organisations, wrongdoing is deliberately engineered to look legitimate. It is embedded in normal processes, supported by plausible paperwork, and disguised by weak data quality, fragmented systems, or approvals that appear compliant.

A “no findings” conclusion may well mean there is no fraud. But it may also mean that the investigation did not test the right risks, did not have access to the right data, or started too late to detect what happened.

For leaders responsible for governance, audit oversight, procurement integrity, and risk management, the more useful question is not “Were there findings?” but rather:

Was the work scoped and executed in a way that would detect fraud if it existed?

This article unpacks why “no findings” is not the same as “no fraud,” what tends to cause false assurance, and how organisations can strengthen forensic and probity reviews so that outcomes carry genuine confidence.

1) “No findings” is an outcome, not a guarantee

Forensic and probity work is constrained by the scope, evidence, and time window available. A clean outcome simply means the team did not uncover sufficient evidence to substantiate wrongdoing within those boundaries.

That is not the same as proving fraud did not occur.

The difference matters because many fraud schemes sit outside a narrow scope:

• Payments routed through related parties rather than direct vendors
• Inflated pricing masked by “valid” quotes
• Split purchases below approval thresholds
• Ghost services billed under legitimate contracts
• Conflicts of interest concealed through proxies

When the assurance statement is interpreted as certainty, organisations may unintentionally preserve the conditions that allowed the risk to develop in the first place.

2) Fraud is increasingly designed to look compliant

Classic fraud often left obvious traces: forged documents, missing invoices, or clearly unauthorised payments. Many modern schemes are more sophisticated. They produce documentation that appears complete, approvals that appear valid, and narratives that withstand casual scrutiny.

A few common patterns include:

• Over-compliance: excessive paperwork to create credibility
• Process camouflage: transactions aligned to policy wording but misaligned to intent
• Plausible justification: “urgent operational need” used repeatedly to bypass controls
• Committee cover: approvals obtained through group decisions to diffuse accountability
• Vendor normalisation: questionable suppliers presented as “trusted” over time

If investigators only assess whether documents exist, rather than whether they make business sense, fraud can remain undetected.

3) Narrow scoping creates false assurance

The most common reason “no findings” does not equal “no fraud” is simple: the scope was too narrow.

This happens when an investigation is framed around a specific allegation or a limited set of transactions, without testing adjacent risk areas where wrongdoing often sits.

For example:

• Reviewing a contract award but not the supplier onboarding
• Checking invoice approvals but not who verified delivery
• Testing payments but not pricing reasonableness and market benchmarks
• Confirming tender compliance but not hidden relationships between bidders

Fraud rarely exists in isolation. It usually involves a chain of decisions. If only one link is tested, the scheme may remain intact.

A good forensic scope does not chase everything. It prioritises intelligently by mapping how value moves through the process and where manipulation would be easiest.

4) Document-based investigations miss behaviour

Fraud is a behavioural problem that leaves data footprints. If investigations focus primarily on documents, interviews, and policy compliance, they can miss the behavioural indicators that reveal misconduct.

Examples include:

• The same employee repeatedly initiating, motivating, and approving
• Unusual urgency narratives, always tied to the same supplier
• Staff resistance to scrutiny or overly defensive explanations
• Operational teams “informally” directing procurement outcomes
• Consistent avoidance of competitive processes without credible justification

Interviewing is vital, but it must be supported by objective validation. Behavioural signals should inform where to test deeper, not be dismissed as “soft” evidence.

5) Poor data quality hides anomalies

Weak master data, duplicated vendor records, inconsistent naming, and fragmented systems are not only operational headaches. They are also excellent hiding places for fraud.

Common data-related blind spots include:

• Duplicate suppliers with small variations in naming
• Unverified bank detail changes
• Supplier ownership data not captured or outdated
• Employee master data inconsistent across systems
• Different systems showing different “truths” about the same transaction

When data is unreliable, anomalies can look like noise. Investigators may struggle to prove patterns because the evidence is not clean enough to support defensible conclusions.

In practice, some of the most valuable outcomes of forensic work are not fraud findings, but exposure of the data weaknesses that make fraud easier to hide.

6) Sampling risk: the scheme may sit outside the sample

Many reviews rely on sampling, especially when transaction volumes are high. Sampling is legitimate, but it creates risk if the sample does not align to the fraud hypothesis.

Fraud is rarely evenly distributed.

It clusters around:

• Specific users
• Certain approvers
• Particular vendors
• A few cost centres
• Certain locations
• Time periods with reduced oversight (year-end, holidays, crises)

If sampling is random without risk weighting, the investigation may simply miss the concentration points.

A stronger approach uses risk-based sampling informed by:

• Outliers (pricing, frequency, split transactions)
• Control override patterns
• Supplier or employee risk attributes
• Approval path anomalies
• Exceptions and manual interventions

7) Timing matters: the trail gets cold

Fraud detection is time-sensitive. The longer an organisation waits to investigate, the harder it becomes to find evidence.

Delays lead to:

• Email and messaging records being lost or overwritten
• Staff leaving or “forgetting” key details
• Documentation being cleaned up after the fact
• Transactions blending into normal operational volume

A “no findings” conclusion after a long delay should be interpreted differently from the same conclusion reached quickly, with full access to relevant data and communications.

8) Conflicts of interest are often invisible without relationship testing

Conflicts of interest are a major driver of procurement fraud and governance exposure, yet they are difficult to detect unless relationship mapping is built into the work.

The problem is that conflicts often sit behind:

• Family members, friends, or proxies
• Secondary business interests
• Shared addresses, contact details, or bank accounts
• Social relationships and informal influence

Many organisations rely on annual declarations, but declarations do not detect undisclosed relationships.

Modern probity and forensic reviews increasingly include relationship testing using:

• Supplier and employee address matching
• Bank account and contact detail overlaps
• Director and shareholder screening
• Bidding pattern analysis across tenders
• Repeated “winner” patterns tied to the same internal users

Without this, “no findings” may simply mean conflicts were never tested.

9) The difference between “no evidence” and “no wrongdoing”

A well-run investigation should clearly differentiate between:

• No wrongdoing occurred (supported by strong testing)
• No evidence was found (within scope and constraints)
• Insufficient access to information needed to conclude
• Weak controls and data that prevent defensible determination

Too many reports collapse these into a single phrase: “no findings.”

A more mature assurance mindset requires clarity about confidence levels, limitations, and residual risk. Organisations should insist on this distinction, particularly when reporting to boards or audit committees.

10) What “good” looks like: a stronger forensic and probity approach

If “no findings” is to carry real meaning, the work must be designed to detect fraud, not just confirm compliance.

A stronger approach typically includes:

a) A clear fraud hypothesis

Define what types of misconduct are plausible in the environment and how they would operate.

b) End-to-end process mapping

Follow the money and decisions across the full chain, not just one segment.

c) Risk-based analytics

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d) Relationship and conflict testing

Validate supplier and employee links beyond declarations.

e) Governance and control stress-testing

Assess how easily controls can be bypassed in practice.

f) Clear articulation of limitations and residual risk

So decision-makers understand what remains untested or uncertain.Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

This is not about expanding scope endlessly. It is about making scope intelligent, defensible, and aligned to real risk.

Practical checklist for leaders reviewing a “no findings” report

When you receive a report that states “no findings,” consider asking:

1. What was the scope and what was explicitly out of scope?
2. Was the work risk-based or primarily document-based?
3. What data was analysed, and what data was unavailable?
4. Was relationship and conflict testing performed?
5. How was sampling designed and what fraud patterns could it miss?
6. Were control overrides and exceptions tested?
7. How quickly was the investigation initiated after the alleged events?
8. What limitations affected the confidence of conclusions?
9. What governance weaknesses were observed even if fraud was not proven?
10. What residual risks remain, and what corrective actions are recommended?

If these questions cannot be answered clearly, “no findings” may simply be “no detection.”

Conclusion

“No findings” can be a legitimate and reassuring result. But it should never be treated as an automatic declaration of safety.

Fraud is adaptive. It hides in complexity, weak data, fragmented oversight, conflicts of interest, and routine decisions that receive little scrutiny. A clean report may mean the organisation is healthy—or it may mean the investigation did not test the right exposures deeply enough to know.

The goal of forensic and probity work is not only to confirm wrongdoing. It is to provide decision-makers with credible assurance about whether the organisation’s governance and controls would detect and deter misconduct in real operating conditions.

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If you would like to discuss how Duja Consulting approaches forensic investigations and probity reviews to reduce hidden exposure and strengthen governance assurance, we would welcome a conversation.