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Themen France: fraud, a major challenge for SMEs: #2 investigate and remediate!

France: fraud, a major challenge for SMEs: #2 investigate and remediate!

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​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Paris | 05.01.2026

According to a recent survey, 69% of companies experienced at least one fraud attempt during the past year. Yet, the risk remains widely underestimated, particularly by SMEs. Too mature to rely solely on informal controls, but not large enough to implement complex and costly systems, SMEs are particularly vulnerable to internal fraud, even when they belong to an international group.

However, simple preventive measures, an effective response plan, and regular external support can significantly reduce the impact of fraud on a company.​

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1. ​FRAUD

Internal fraud, or occupational fraud, refers to any intentional act committed by an employee, executive, or manager to divert company resources for personal gain.

 

Asset misappropriation is the most common method, accounting for 89% of cases. It includes cash larceny, inventory theft, payments to fictitious suppliers, falsified expense reports, or salary payments to ghost employees.

 

Financial statement manipulation, though less frequent (5% of cases), is by far the most costly type of fraud. It includes understating expenses or liabilities, overstating revenues or assets, or recording accounting adjustments to meet performance targets.

 

Criminologist Donald R. Cressey's model identifies three key elements behind fraudulent acts:


​Grafik_Fraud_EN-768x654.png

  • PRESSURE:

    A personal or professional financial need (debts, costly lifestyle, unrealistic targets) that drives action.

  • RationaliZation :

    A moral or psychological justification used by the perpetrator (“I deserve this,” “everyone does it,” “I’ll pay it back later”).

  • OpportunitY :

    Weaknesses in internal controls that enables fraud.

 

While the first two factors are largely beyond a company’s control, companies can act on the third by reducing opportunities through prevention (see our article “France: Fraud, a major challengen for SMEs: #1 anticipate, secure, alert“)
 
If, despite preventive measures, fraud is detected, the company can mitigate the impact by conducting an effective investigation and implementing a remediation plan.



2. INVESTIGATION

The detection of fraud immediately places the company in a critical crisis situation in terms of its stability, reputation, and financial security.

 

Its ability to respond quickly determines how well risks are contained.

 

Certain actions are essential to ensure a response that is effective, rigorous, and legally sound:

  • Securing systems and access
  • Preserving evidence
  • Launching a financial investigation
  • Managing internal and external communication

 

Speed and discretion are key to limiting the damage. Beyond the direct cost of misappropriation, indirect consequences such as legal fees, restructuring costs, reputational damage, and loss of trust must be considered.

 

This report is a critical tool for the company to work with external advisors in defining the appropriate legal response.
 
An effective investigation involves several steps, often carried out simultaneously: securing and collecting evidence, conducting in-depth IT analysis to identify digital traces, formulating and testing hypotheses of fraudulent schemes, interviewing employees or witnesses, and analyzing data using specialized tools.
 
SMEs rarely have sufficient internal resources - human or technical - to conduct this type of investigation thoroughly and securely while maintaining business continuity during a crisis. Additionally, the close proximity between employees can make the process more complex.
 
In this context, engaging an external expert in forensic accounting, a term that refers to the integration of accounting, auditing, and investigative skills, becomes a strategic solution.

The advantages of an external forensic accounting expert are::

  • ​The detection of hidden irregularities through specialized expertise, advanced techniques, and professional tools.
  • Communication of sensitive information not disclosed internally to an independent third party.
  • Preservation of operational continuity by allowing employees to remain focused on their area of responsibility.
  • Preservation of confidentiality, essential for protecting reputation.
  • Preparation of a robust report to support judicial and regulatory proceedings.​
 
Outsourcing this critical phase to experts not only protects the company but also helps restore trust.
 

Advances in Artificial Intelligence are transforming financial investigations


Today, more than 60% of forensic firms integrate AI to accelerate evidence collection and analysis. While these tools do not replace investigator judgment, they reduce processing time and improve efficiency. They can be used for data sorting and analysis, detecting anomalies in large datasets, document matching, and identifying complex fraud patterns.

3. REMEDIATION​

Once the fraud is contained, immediate remediation measures are essential. The objective is twofold: reduce the risk of recurrence and reassure stakeholders.

 

This involves:

  • Implementing immediate and visible corrective measures to strengthen control mechanisms
  • Conducting regular external audits to objectively assess actions and test control effectiveness
  • Deploying transparent communication
  • Providing internal training for employees

 

A well-executed remediation plan goes beyond repair: it is a strategic lever for strengthening the company's resilience and restoring trust in the long-term.


CONCLUSION

Internal fraud is not a theoretical risk. It is a real threat for most companies, and SMEs are no exception.
While it cannot be completely eliminated, its impact can be contained through a three-step approach: 1) prevent to reduce opportunities, 2) investigate promptly and discreetly to contain damage and preserve evidence, and 3) remediate to strengthen controls, prevent recurrence, and restore stakeholder trust.
 
Our teams are available to discuss your needs and answer any questions you may have. Please do not hesitate to contact us.

For more information, join our webinar ‘Financial fraud: a major prevention challenge for SMEs’ on 13 January 2026 at 11:00 a.m. Webinar in French, admission is free. 
Register here »​

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Typhaine Lacau

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+33 6 73 06 13 24

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Julius Wunderle

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+49 711 78 19 14 457

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