Final answer:
A company may need to conduct an internal investigation into employee fraud to mitigate liability, ascertain loss details, and protect against wrongful termination claims, while addressing moral hazard and regulatory compliance.
Step-by-step explanation:
A company may need to undertake an internal investigation into alleged employee fraud for several reasons, including to mitigate the company's vicarious liability for the wrongful conduct, to determine the source and amount of loss, and to guard against wrongful termination accusations. When employees justify their fraudulent actions as serving a higher purpose, they may attempt to appeal to a higher authority, diluting the perceived severity of their actions. Meanwhile, companies are also tasked with adhering to regulations and standards that ensure employee safety and ethical conduct. In addition, such investigations are crucial in addressing the issues of moral hazard and maintaining integrity within insurance and other business operations.