“Fraud is not an accounting problem; it is a social phenomenon.” Joe Wells
Most companies will not readily admit that their organizations may be vulnerable to fraud.
According to the 2020 Report to the Nations published by the Association of Certified Fraud Examiners (“ACFE”), which contains an analysis of approximately 2,500 cases of occupational fraud that were investigated between January 2018 and September 2019, organizations lose 5% of their annual revenues to fraud. While this number is only a general estimate based on the opinion, it represents the collective observations of anti-fraud experts who together have investigated hundreds of thousands of fraud cases. Based on the ACFE’s study, the median loss caused by frauds was $125,000, with 21.0% of the cases resulting in losses of at least $1 million.
If you think Good Tone or Conduct from the Top means you have an ethical environment, guess again!
Some of your people are up to no good.
Corruption can take many forms, but its root cause could and often does include a conflict of interest of some sort and possibly collusion.
OECD states, Conflict of interest
American Conference Institute’s 35th International Conference on the Foreign Corrupt Practices Act
“Fighting white-collar crime is a top priority for the Department, and we increased prosecutions in every
Related party transactions could be a “red flag“, and must be evaluated with the proper skepticism! Perceived opportunities to commit management fraud include the ability of the fraudster to
Compiling a list of thought leaders in ethics and compliance is fun, but so challenging. There are simply too many thoughtful people in this field — which is itself enormous and wide-ranging — to call out everyone worth following. So below is a small slice of the thinkers in corporate ethics and compliance that I try to follow.» Read More
Ultimately, a monitor should benefit the company, its employees, shareholders, and the public by effectively furthering the goal of preventing and detecting future misconduct.» Read More
IIA you Awarded Winning Article
The treasurer of one of the largest oil companies in the United States recently learned the internal controls over the initiation of wire transfers were
At a minimum, as part of (emphasis added) your overall fraud risk management program, the following key processes/functions should be analyzed along with the embedded (key) internal controls,
I am pleased to announce the next offering of my Doing Compliance Master Class. I am partnering with Baker Tilly Virchow Krause, LLP, to put on a two-day class
Compliance officers talk about controls constantly. Effective controls are the lifeblood of what makes a compliance program work. Most of us can rattle off examples of controls, or recognize a control when we see one.
So my fellow speaker asked the audience: What is a control?
Nobody dared answer. We all, me included, were suddenly uncertain that we could define a control correctly.
The speaker who posed this question is Jonathan T. Marks, partner at Baker Tilly and a prolific thinker on all things forensics, audit, and internal control. Lately Marks has been asking audit and compliance audiences to define a control — and to his dismay, most people can’t.
Read Marks’ definition of internal control.» Read More
Audit committees (AC) are charged with overseeing financial reporting and audit processes in U.S. public companies. Scandals in the pre-Sarbanes-Oxley Act of 2002 (SOX) era (e.g.,
In addition to establishing an ethical environment, board members and management must also take the lead in implementing and maintaining a formal fraud risk management program. One key element of such a program is a fraud risk assessment.
Risk assessments are part of the discipline of risk management, where enhanced frameworks and techniques have emerged. Risk management comprises the identification, assessment, and prioritization of risks followed by the coordinated and efficient use of resources to monitor, minimize, and otherwise control the impact of the risks on the organization.» Read More