Glossary of Investigation Terms

Investigations and due diligence have a working vocabulary, used loosely outside the profession. This glossary defines the terms that appear most often in corporate checks, fraud cases, asset tracing, litigation support and anti-money-laundering work. Each entry describes what the term means in practice rather than restating a rule, and notes where a country gives it a specific legal meaning.

How to use this glossary

The entries are grouped by initial letter for a reader who needs to follow a report or a policy without a legal background. Where a statute or a regulator defines a term differently, the definition here describes the common professional usage; the authoritative wording is the one in the applicable rule. Terms that belong together, such as source of funds and source of wealth, sit near each other.

A and B

AML (anti-money-laundering)

The law, rules and controls designed to stop the proceeds of crime being moved through banks, companies and other businesses. It combines customer checks, monitoring and the reporting of suspicion to a national authority.

Asset tracing

The work of locating money and property that has been moved or hidden, usually to support recovery in a claim or an enforcement action. It follows the money through bank accounts, companies, trusts and land, using public registers, corporate filings and, where available, court orders.

Beneficial owner

The natural person who ultimately owns or controls a company or arrangement, even when the shares are held by another company, a trust or a nominee. Many countries now keep a register of beneficial owners, and the rules on access to those registers differ from country to country.

C

Chain of custody

The documented record of everyone who has held or handled a piece of evidence, and every transfer between them, from collection to presentation. A break in the chain is an argument that the item may have been altered.

Compliance monitor

An independent person or firm appointed, usually under a settlement with a regulator or prosecutor, to test whether a company is carrying out the reforms it promised. The monitor reports to the appointing authority rather than to the company.

Corporate intelligence

Information about companies, people and markets gathered from public and lawful sources for a business decision. It is the raw material of due diligence, distinct from an investigation aimed at an incident.

D to F

Due diligence

The checks carried out before a transaction or a new relationship to establish the facts about a counterparty. In law, the phrase also describes the standard of care a person is expected to take; in business, it is the practical version of that standard applied to a deal.

Enhanced due diligence

The additional checks applied when a relationship carries higher risk, for example because the customer is politically exposed, the transaction is unusual, or the country has weak controls. It goes beyond identity and ownership to the source of funds and the reason for the transaction.

Evidence

Material that can be used to establish a fact in a formal proceeding. Information becomes evidence when its origin, its handling and its meaning can be demonstrated, which is why the record of how an item was collected matters as much as the item itself.

Forensic accounting

The examination of financial records to reconstruct what happened. In a fraud case it is used to trace transactions, quantify a loss and show a pattern that ordinary reporting would not reveal.

Focused interview

A structured interview, in a workplace or regulatory investigation, designed around the evidence already gathered. It is planned, recorded and conducted so that the account obtained can be relied on later.

G to M

KYC (know your customer)

The process by which a firm establishes who its customer is and understands the nature of the relationship. It begins with identity and reaches ownership, business purpose and, in higher-risk cases, the origin of the money.

Litigation support

The work that prepares a dispute for the people who will argue it: collecting and numbering documents, preserving evidence, building a chronology and presenting complex facts clearly to a court.

Materiality

The judgement of whether a fact is significant enough to affect a decision, a report or a set of accounts. Its meaning depends on the decision the document supports.

Money laundering

The process of making the proceeds of crime appear to come from a lawful source, usually through transactions, companies or jurisdictions that break the link between the money and the offence.

Monitorship

The arrangement under which a compliance monitor works inside a company for a defined period, with a written scope, a fixed term and an end point set out in the settlement that created it.

N to R

Open-source intelligence (OSINT)

Information gathered from publicly available sources: registers, court records, media, professional listings and public social media. It is powerful and it is limited, because it shows only what has been published or filed.

PEP (politically exposed person)

A person entrusted with a prominent public function, or a close associate or family member. The status raises the risk that a transaction involves corruption and triggers enhanced checks in most anti-money-laundering regimes.

Red flag

A fact that does not fit and that a reasonable reader would want explained. It is a question to resolve, not a conclusion, and a report that lists flags without resolving them is incomplete.

Reputation audit

A structured review of the public record about a person or a company, covering media, court reporting, regulatory notices and public roles. It looks for patterns and is careful to separate an allegation from a finding.

S to Z

Sanctions screening

Checking customers, owners, counterparties and payments against national and international sanctions lists. It is a control, not a one-off step, and it runs as lists change and relationships evolve.

Source of funds

Where the money for a specific transaction came from. It is narrower than source of wealth and is asked when a particular payment or purchase needs to be explained.

Source of wealth

How a person accumulated their overall wealth, through a business, a salary, an inheritance or an investment. It is asked in higher-risk relationships and is judged over a lifetime rather than for one transaction.

Suspicious activity report (SAR)

A report filed by a regulated firm with its national financial intelligence unit when it suspects that money is connected to crime. The rules on when one is required, and on tipping off the customer, vary by country.

Whistleblower

A person who reports wrongdoing from inside an organisation. Many jurisdictions protect whistleblowers by law, and most compliance frameworks require a channel through which concerns can be raised without fear of reprisal.

Witness statement

A written account by a person of what they saw or know, usually signed and dated and often prepared from a recorded interview. It is how much evidence reaches a court or tribunal.