During a fraud investigation, once it is found out who committed the fraud, the employer would most likely choose to terminate the employees job and try for restitution from said employee or recover with fraud insurance.  If an employer tries to approach the employee before an investigation has even taken place, and I the employer is not nice about the way that they approach the employee, then the employee can quit their job and then when the employer decides to turn them in, the said employee can make up their whole story, for example, if the employee has stolen money, and the employer finds out and confronts the employee and goes off on them and then the employee leaves/quits before the employer starts an investigation, then the employee can tell the cops that he gave the money back to the employer because the employer asked for it.  The employer has no proof now that the employee didn't pay it back. 

From the standpoint of making a good business decision of punishment in pursuing a fraud examination, I think that it is very important to punish the alleged person that committed te fraud.  This will show other employees that you will initiate an investigation and you will take action against anyone that decides to commit fraud against you.