The document discusses how fraud and integrity risks are changing and increasing during the economic downturn. It summarizes that incentive/pressure, opportunity, and rationalization - the three conditions of the fraud triangle - are all heightened. Specific fraud risks that may emerge include issues in the supply chain, revenue leakage, bribery, anticompetitive practices, improper financial reporting, data theft, and weakened internal controls. The document recommends that organizations assess these risks, employ data analytics to detect misconduct, and implement a comprehensive antifraud framework based on the COSO model to proactively manage fraud risks.
The slides provides fundamental understanding of concepts, principles and issues in fraud risk management. It is a comprehensive summary of general knowledge and understanding about the fraud risk management.
The slides provides fundamental understanding of concepts, principles and issues in fraud risk management. It is a comprehensive summary of general knowledge and understanding about the fraud risk management.
Fraud awareness for companies and their employees covering legal aspects of securing confidential information, social engineering techiniques and what to look for in suspect emails.
The presentation provides overall insight of operational fraud risk management. It explains the operational fraud risk and mitigation strategies. The role of Internal audit and audit committee is further exemplified
Essentials of a Highly Effective Employee Fraud Awareness ProgramFraudBusters
Webinar series from FraudResourceNet LLC on Preventing and Detecting Fraud in a High Crime Climate. Recordings of these Webinars are available for purchase from our Website fraudresourcenet.com
This Webinar focused on the subject in the title
FraudResourceNet (FRN) is the only searchable portal of practical, expert fraud prevention, detection and audit information on the Web.
FRN combines the high quality, authoritative anti-fraud and audit content from the leading providers, AuditNet ® LLC and White-Collar Crime 101 LLC/FraudAware.
This presentation explains how you can prevent and deter fraud in your nonprofit organization, why some employees commit fraud and how to spot behavioral "red flags," what to do if you discover fraud in your organization, and common fraud schemes to watch for.
CPAs responsibilities to detect fraud in audits, required approaches, types of financial statement frauds and specific case examples of different types of financial statement fraud
On December 5, 2013, Ron Steinkamp, principal, government advisory services at Brown Smith Wallace, presented at the 2013 MIS Training Institute Governance, Risk & Compliance Conference. Ron focused on the following keys to fraud prevention, detection and reporting:
1. Anti-fraud culture
2. Fraud policy
3. Fraud awareness/training
4. Hotline
5. Assess fraud risks
6. Review/investigation
7. Improved controls
It is all about social and professional issues in computing.In today's era its really important to understand how a fraud happens.The presentations also helps to differentiate between fraud and embezzlement.Categories of frauds are also available in this section.
How Excessive Compliance, Complex Sanctions, and prohibitive penalties have driven banks to De-Bank so many clients just to spare themselves the hassle of enhanced due diligence.
Integrating the prevention of cyber crime into the overall anti-crime strateg...Jacqueline Fick
Integrating the prevention of cybercrime into the overall anti-crime strategies of your organisation. Broad overview of the South African law that applies to cyber. Value of information governance and a hands-on approach to the detection and prevention of cyber crime in your organisation.
Fraud awareness for companies and their employees covering legal aspects of securing confidential information, social engineering techiniques and what to look for in suspect emails.
The presentation provides overall insight of operational fraud risk management. It explains the operational fraud risk and mitigation strategies. The role of Internal audit and audit committee is further exemplified
Essentials of a Highly Effective Employee Fraud Awareness ProgramFraudBusters
Webinar series from FraudResourceNet LLC on Preventing and Detecting Fraud in a High Crime Climate. Recordings of these Webinars are available for purchase from our Website fraudresourcenet.com
This Webinar focused on the subject in the title
FraudResourceNet (FRN) is the only searchable portal of practical, expert fraud prevention, detection and audit information on the Web.
FRN combines the high quality, authoritative anti-fraud and audit content from the leading providers, AuditNet ® LLC and White-Collar Crime 101 LLC/FraudAware.
This presentation explains how you can prevent and deter fraud in your nonprofit organization, why some employees commit fraud and how to spot behavioral "red flags," what to do if you discover fraud in your organization, and common fraud schemes to watch for.
CPAs responsibilities to detect fraud in audits, required approaches, types of financial statement frauds and specific case examples of different types of financial statement fraud
On December 5, 2013, Ron Steinkamp, principal, government advisory services at Brown Smith Wallace, presented at the 2013 MIS Training Institute Governance, Risk & Compliance Conference. Ron focused on the following keys to fraud prevention, detection and reporting:
1. Anti-fraud culture
2. Fraud policy
3. Fraud awareness/training
4. Hotline
5. Assess fraud risks
6. Review/investigation
7. Improved controls
It is all about social and professional issues in computing.In today's era its really important to understand how a fraud happens.The presentations also helps to differentiate between fraud and embezzlement.Categories of frauds are also available in this section.
How Excessive Compliance, Complex Sanctions, and prohibitive penalties have driven banks to De-Bank so many clients just to spare themselves the hassle of enhanced due diligence.
Integrating the prevention of cyber crime into the overall anti-crime strateg...Jacqueline Fick
Integrating the prevention of cybercrime into the overall anti-crime strategies of your organisation. Broad overview of the South African law that applies to cyber. Value of information governance and a hands-on approach to the detection and prevention of cyber crime in your organisation.
This presentation is an overview of Fraud Risk Management in Indian companies and the role of the Board of Directors in the context of the newly enacted Companies Act, 2013.
Fraud and corporate governance changing paradigm in India 2012EY
This report offers a perspective on the bribery landscape across Europe, the Middle East, India and Africa (EMEIA), including enforcement trends, risks for businesses to be aware of and mitigating steps companies may want to consider.
For further information on EY's fraud investigation and dispute services, please visit: http://www.ey.com/IN/en/Services/Assurance/Fraud-Investigation---Dispute-Services
Overcoming compliance fatigue - Reinforcing the commitment to ethical growth ...EY
This presentation is based on EY FIDS' 13th Global Fraud Survey. It highlights the state of fraud, bribery and corruption, comprising global as well as India findings.
For further information, please visit: http://www.ey.com/FIDS
If you would like to have a training session at your business to educate your employees how to identify & prevent occupational fraud please contact me at ann@yeagerboyd.com
The initial stage of the supply chain process is the planning stage. We need to develop a plan or strategy in order to address how the products and services will satisfy the demands and necessities of the customers. In this stage, the planning should mainly focus on designing a strategy that yields maximum profit.
For managing all the resources required for designing products and providing services, a strategy has to be designed by the companies. Supply chain management mainly focuses on planning and developing a set of metrics.
1.4.2) Develop (Source)
After planning, the next step involves developing or sourcing. In this stage, we mainly concentrate on building a strong relationship with Develop of the raw materials required for
production. This involves not only identifying dependable suppliers but also determining different planning methods for shipping, delivery, and payment of the product.
Companies need to select suppliers to deliver the items and services they require to develop their product. So, in this stage, the supply chain managers need to construct a set of pricing, delivery and payment processes with suppliers and also create the metrics for controlling and improving the relationships.
Finally, the supply chain managers can combine all these processes for handling their goods and services inventory. This handling comprises receiving and examining shipments, transferring them to the manufacturing facilities and authorizing supplier payments.
1.4.3) Make
The third step in the supply chain management process is the manufacturing or making of products that were demanded by the customer. In this stage, the products are designed, produced, tested, packaged, and synchronized for delivery.
Here, the task of the supply chain manager is to schedule all the activities required for manufacturing, testing, packaging and preparation for delivery. This stage is considered as the most metric-intensive unit of the supply chain, where firms can e gauge the quality levels, production output and worker productivity.
Findings from India Fraud Survey 2012: Fraud and Corporate Governance - Chang...EY
A report based on a survey conducted to understand the fraud scenario in India. This study aims to understand how businesses have coped with increasing fraud and corruption risk last year, what the emerging fraud risks in the industry are and the measures taken by various organizations to mitigate these risks.
For further information on EY's fraud investigation and dispute services, please visit: http://www.ey.com/IN/en/Services/Assurance/Fraud-Investigation---Dispute-Services
45The Security Survey An OverviewA security survey is a.docxalinainglis
45
The Security Survey: An Overview
A security survey is a critical, on-site examination…to ascertain the present security
status, identify deficiencies or excesses, determine the protection needed, and
make recommendations to improve the overall security of the operation.
—Raymond M. Momboisse, Industrial Security for Strikes, Riots and Disasters,
Charles C. Thomas Publishers, 1977
The goal of risk management—to manage risk effectively at the least possible cost—cannot
be achieved without eliminating or reducing, through a total management commitment,
the incidents that lead to losses.1 Before any risk can be eliminated or reduced, it must first
be identified. One proven method of accomplishing this task is the security survey. Charles
A. Sennewald, author and security consultant, has defined the security survey as follows:
“The primary vehicle used in a security assessment is the survey. The survey is the process
whereby one gathers data that reflects the who, what, how, where, when, and why of the
client’s existing operation. The survey is the fact-finding process.”2
Why Are Security Surveys Needed?
There are reports published by the Association of Certified Fraud Examiners (ACFE)
estimating that the cost of fraud and financial abuse to American business was in excess
of $994 billion per year in 2008 and rising. This figure is believed by most authorities to be
very conservative. The sad fact is that no one organization is capable of collecting all the
data available concerning fraud. As an example, in America we have an alarming trend
in Medicare fraud, costing taxpayers untold millions of dollars. The biggest problem, and
the one seen most often by fraud investigators, is that most corporate managers do not
know if they have theft problems. Worse, many do not even want to know that they have
a problem with employee theft! Some managers seem to prefer to keep things as they are
and to regard any suggestion of the need for increased security as a direct or indirect crit-
icism of their ability to manage their operations. We hope that this attitude has changed
for the better as a result of the downturn in the global economy. In times of economic
difficulties anything that affects the bottom line (profits) is not tolerated. Nevertheless,
where fraud exists, most business fraud surveys calculate losses at about 6 percent of
annual revenue. Some surveys we have seen reported have concluded that losses attrib-
utable to employee theft (internal theft) equal or exceeded profits! This is especially
7
1 The field of risk management encompasses much more than security and safety. These two subjects, along
with insurance, however, are the cornerstones of most effective risk management programs.
2 Sennewald, C. A., 2004. CPP, Security Consulting, third ed. Butterworth-Heinemann, Elsevier, Boston, MA.
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46 RISK ANALYSIS AND THE SECURITY SURVEY
true for chain-store operations, .
“Nearly half of all victim organizations do not recover any losses that they suffer due to fraud” according to the 2012 Report to the Nations presented by the Association of Certified Fraud Examiners. Although, there are no statistics that report the total number of entities and the amount defrauded, regardless of size, any organization can become a victim of fraud. Kyle Anne Midkiff’s white paper, Act Now Before it’s Too Late, provides five important steps to help organizations of any size prevent fraud.
PAGE 280APPLYING THE CONCEPTTRUTH OR CONSEQUENCES PONZI SCHEM.docxsmile790243
PAGE 280
APPLYING THE CONCEPT
TRUTH OR CONSEQUENCES: PONZI SCHEMES AND OTHER FRAUDS
In the financial world, you always have to be on the lookout for crooks. Fraud is the most extreme version of moral hazard, and it is remarkably common.
The term Ponzi scheme has its origins in a 1920 scam run by serial con artist Charles Ponzi. Promising a 50 percent profit within 45 days, he swindled unsuspecting investors out of something like $250 million in 2014 dollars. Ponzi never invested their money. Instead, he paid off early investors handsomely with the money he obtained from subsequent investors.
Financial laws are now far more elaborate than in Ponzi’s day, and governments spend much more to enforce them, but frauds persist.
Bernie Madoff is the leading recent example. For decades, Madoff was a respected member of the investment community and able to escape detection. In the same manner as Ponzi, Madoff was redeeming requests for funds with the money he collected from more recent investors. Madoff’s con, which may have begun as early as the 1970s, failed only when the financial crisis of 2007–2009 depleted his funds, making it impossible for him to pay off the final cohort of wealthy, sophisticated—yet apparently quite gullible—investors and financial firms. The Madoff scandal dwarfed Ponzi’s racket: at the time the scheme blew up, the losses were estimated at $17.5 billion, and extensive efforts at recovery have put final losses in the neighborhood of $7 billion.
Unfortunately, in a complex financial system, the possibilities for fraud are widespread. Most cases are smaller and more mundane than those of Madoff or Ponzi, but their cumulative size is significant. One source devoted to tracking just Ponzi-type frauds in the United States listed 70 schemes worth an estimated $2.2 billion in 2014 alone.*
We aren’t going to get rid of Ponzi schemes and other frauds (see In the Blog: Conflicts of Interest in Finance). But the mission of ferreting them out and prosecuting those responsible is essential. A well-functioning financial system is based on trust. That is, when we make a bank deposit or purchase a share of stock or a bond, we need to believe that the terms of the agreement are being accurately represented and will be carried out. Economies where property rights are weak and enforcement is unreliable also usually supply less credit to worthy endeavors. That means lower production, lower income, and lower welfare.
imagesIN THE BLOG
Conflicts of Interest in Finance
Financial corruption exposed in the years since the financial crisis is breathtaking in its scale, scope, and resistance to remedy. Traders colluded to rig the foreign exchange (FX) market, where daily transactions exceed $5 trillion, and to manipulate LIBOR, the world’s leading interest rate benchmark (see Chapter 13, Applying the Concept: Reforming LIBOR). Firms have facilitated tax evasion and money laundering. And Bernie Madoff engineered what was arguably the largest Ponzi.
The 2017 Regulatory and Examination Priorities Letter1, published by FINRA on January 4th, is a fitting reminder of the resolve of Regulators to better execute their mission of investor protection and market integrity. Although the Libor and FX scandals might seem like distant memories, Regulators have continued on the war path. We would like to share some thoughts based on work we have been involved in last year. The idea is to help lawyers and banks have a grown-up discussion and be prepared if, or rather more likely, when, the Regulator knocks at the door.
The 2017 Regulatory and Examination Priorities Letter, published by FINRA on January 4th, is a fitting reminder of the resolve of Regulators to better execute their mission of investor protection and market integrity. Although the Libor and FX scandals might seem like distant memories, Regulators have continued on the war path. We would like to share some thoughts based on work we have been involved in last year in a regulatory competition investigation.
The 2017 Regulatory and Examination Priorities Letter1, published by FINRA on January 4th, is a fitting reminder of the resolve of Regulators to better execute their mission of investor protection and market integrity. Although the Libor and FX scandals might seem like distant memories, Regulators have continued on the war path. We would like to share some thoughts based on work we have been involved in last year. The idea is to help lawyers and banks have a grown-up discussion and be prepared if, or rather more likely, when, the Regulator knocks at the door.
Remote sensing and monitoring are changing the mining industry for the better. These are providing innovative solutions to long-standing challenges. Those related to exploration, extraction, and overall environmental management by mining technology companies Odisha. These technologies make use of satellite imaging, aerial photography and sensors to collect data that might be inaccessible or from hazardous locations. With the use of this technology, mining operations are becoming increasingly efficient. Let us gain more insight into the key aspects associated with remote sensing and monitoring when it comes to mining.
Accpac to QuickBooks Conversion Navigating the Transition with Online Account...PaulBryant58
This article provides a comprehensive guide on how to
effectively manage the convert Accpac to QuickBooks , with a particular focus on utilizing online accounting services to streamline the process.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Explore our most comprehensive guide on lookback analysis at SafePaaS, covering access governance and how it can transform modern ERP audits. Browse now!
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Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
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"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
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⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
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"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your company’s legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, we’ll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
Attending a job Interview for B1 and B2 Englsih learnersErika906060
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
1. Fraud in a Downturn
A review of how fraud and other integrity risks affect business
September 16, 2009
Presented by Kristin Rivera PartnerPresented by Kristin Rivera, Partner
4. Section 1 - Introduction
The landscape
• The economic downturn is changing the nature and scale of fraud and
integrity risks that organizations face.
– The speed of change increases the opportunities to commit fraud.g
– More people will feel real pressure to ‘cross the line’ or to look the other way
while others do so.
The receding economic tide has exposed more frauds that have been ongoing– The receding economic tide has exposed more frauds that have been ongoing
while economic conditions were good.
– As the economy rebounds, companies will feel pressure to improve performance
and this may also lead to inappropriate actionsand this may also lead to inappropriate actions
• Fraud and integrity are critical business issues—not just legal and
compliance issues.p
• The regulatory pendulum has swung back to its post Enron position, and
public sentiment against white collar crime is one of zero tolerance.
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 2
5. Section 1 - Introduction
The landscape
• How are fraud, corruption, abuse and other integrity threats changing during
this period of economic decline?
• What are the fraud schemes that may emerge and the likely regulatoryy g y g y
response?
• What strategies are proactive organizations implementing to manage short-
term risks but also enhance long-term stakeholder value?term risks but also enhance long-term stakeholder value?
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 3
6. Section 1 - Introduction
The fraud triangle
Developed by Dr. Donald Cressey, the Fraud Triangle describes three
conditions that are commonly found when fraud occurs.
Incentive/
pressure
!Fraud risk
Opportunity Rationalization
The global economic decline is such that each of these three factors are
heightened as never before.
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 5
7. Section 1 - Introduction
The fraud triangle
Incentive/Pressure
As people lose their jobs pressures
increase. Those still in employment
Incentive/
pressure
increase. Those still in employment
feel ever more threatened, the
pressure to commit fraud will increase.
When someone’s livelihood rests on
!Fraud riskWhen someone s livelihood rests on
obtaining a new order, some people
will make the wrong choice while
others will look the other way Opportunity Rationalization
Fraud risk
others will look the other way. pp y
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 6
8. Section 1 - Introduction
The fraud triangle
Opportunity
The economic downturn is forcing an
unprecedented pace of change. As
Incentive/
pressure
unprecedented pace of change. As
change happens, gaps in the control
system can and will appear.
Checks and balances put in place to
!Fraud riskChecks and balances put in place to
maintain control may be abandoned
and procedures whose purpose was to
detect anomalies may be suspended Opportunity Rationalization
Fraud risk
detect anomalies may be suspended. pp y
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 7
9. Section 1 - Introduction
The fraud triangle
Rationalization
In difficult economic times the capacity
for people to rationalize fraud and
Incentive/
pressure
for people to rationalize fraud and
corruption increases.
“The company is fundamentally sound
if I have to cross the line to get us
!Fraud risk– if I have to cross the line to get us
through the next six months, so be it.”
Opportunity Rationalization
Fraud risk
pp y
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 8
11. Section 2 - Fraud and integrity risks
Fraud and integrity risks
Given these circumstances, what are
the likely effects on corporations,
investors, regulators and government?
We believe board and audit
committees should be asking
themselves and key stakeholders the
questions below…
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 11
12. Section 2 - Fraud and integrity risks
Fraud and integrity risks
1. How much are fraud and abuse losses in the supply chain and through
revenue leakage costing your business?
– Fraud losses can run as high as 7% of revenue.1g
– Studies show that effective fraud management produces an 8:1 return on
investment,2 and strong controls reduce fraud by at least 30%.3
1 Association of Certified Fraud Examiners 2008 Report to the Nation on Occupational Fraud and Abuse.
2 Nelsestuen, Rodney, Enterprise Fraud Management in Financial Services: Restoring Confidence in an Uncertain World, Tower Group, September 2007.
3 Kielstra, Paul, Global Fraud Survey, The Economist Intelligence Unit, 2008.
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 12
13. Section 2 - Fraud and integrity risks
Fraud and integrity risks
2. Is your organization at risk of DOJ, SEC or foreign government scrutiny for
public and commercial bribery in the US or overseas?
– There remains significant opportunity within global organizations to engage ing y g g g g
bribery via “consulting payments” in order to win new business.
– The anti-bribery provisions of the FCPA prohibits corrupt payments to foreign
officials for the purpose of obtaining or keeping business.
– Regulators are prosecuting companies and their directors and officers for the
inappropriate actions of business partners in the sales channel and supply chain
such as distributors and sales agents.
– Many organizations face significant reputational, legal and financial risk from
inadequate due diligence and monitoring controls in relation to business partners.
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14. Section 2 - Fraud and integrity risks
Fraud and integrity risks
3. Is your organization at risk of breaching competition laws?
– The Justice Department and Federal Trade Commission levied fines totaling
billions of dollars in 2008 related to the investigation and detection of anti-
competitive cartel practices.
– The regulatory fines that can be levied for price fixing, bid rigging and market
sharing can be up to 10% of turnover.
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15. Section 2 - Fraud and integrity risks
Fraud and integrity risks
4. How robust are your controls in treasury and banking operations?
– When control environments weaken, rogue traders have the opportunity to
operate undetected as they trade beyond the limit of their authority.
– As companies approach banking covenant breaches, the temptation to ‘massage’
the numbers provided to their banks will increase.
– As banks face pressure to control their own costs the resources available toAs banks face pressure to control their own costs, the resources available to
counter this threat are constrained.
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16. Section 2 - Fraud and integrity risks
Fraud and integrity risks
5. Is your organization at risk of significant data theft?
– Criminal organizations have for some time recognized the value of personal data,
and while bank account details continue to have a black market value, there will
be a significant risk of theft.
– Consider where you are holding personal information and how this data is
controlled.
– Not enough is being done to address the risk of deliberate theft by criminal
organizations working in collusion with permanent, short-term or temporary staff
to infiltrate organizations and circumvent existing control systems.
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17. Section 2 - Fraud and integrity risks
Fraud and integrity risks
6. How well does your organization employ data analytics to prevent and
detect misconduct?
– Where senior managers have colluded with third parties to misrepresent financialg
information and statements, fraud can be difficult to identify unless the company
has robust internal controls and processes in place.
– Fraud and forensic technologists find that even fraud that is the result of collusion
can cause data anomalies that companies can identify using data analytics.
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18. Section 2 - Fraud and integrity risks
Fraud and integrity risks
7. Are you weakening your first line of defense?
– Operations and finance personnel are the first line of defense against fraud,
corruption and abuse.
– Because the legal and internal audit functions are removed from the day-to-day
business, it is not wise to rely on them as the principal line of defense.
– Downsizing unless carefully planned and managed skyrocketsDownsizing, unless carefully planned and managed, skyrockets
misconduct risks.
– Downsizing can eliminate critical segregation of duties. The fear of being the one
selected for downsizing can lead employees to engage in fraud to cover upselected for downsizing can lead employees to engage in fraud to cover up
innocent mistakes.
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19. Section 2 - Fraud and integrity risks
Fraud and integrity risks
8. If a crisis occurred, how well prepared are you to react?
– Companies need to be ‘investigation ready’, with policies in place regarding the
conduct of investigations and knowledge of where data is stored and how it can
be speedily retrieved.
– e-Discovery readiness is an increasingly critical component of litigation.
– Organizations are expected to conduct comprehensive root-cause analysis andOrganizations are expected to conduct comprehensive root-cause analysis and
implement and monitor controls to prevent recurrence.
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21. Section 3 - The strategy of the proactive organization
The PwC antifraud framework
Control environment
• Board oversight
• Codes of ethics/conduct
• Anonymous reporting
Fraud event identification and risk assessment
Identify entity
level scheme
& scenario risks
Assess
likelihood
& impact
Conduct
self-assessment
at functional & local
• Other entry
level activities
business unit levels Develop a
risk response
Continuous
Incident response
& remediation
• Investigate
• Perform root
cause analysis
Monitoring Activities
• Monitor fraud risk
factors and indicators
• Audit for ‘red flags’
Entity and business process level
control activities
Develop new
/enhance
existing
Validate
operating
effectiveness
Evaluate
control
designs
Continuous
reassessment
y
• Search for
other misconduct
• Enhance controls
existing
controls
effectiveness designs
In 1992, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) developed a model for evaluating internal controls. This model has
been adopted as the generally accepted framework for internal control and is widely recognized as the definitive standard against which organizations measure
the effectiveness of their systems of internal control. We have adapted the COSO framework to illustrate some of the key elements of a fraud and integrity risk
control framework.
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22. Section 3 - The strategy of the proactive organization
The PwC antifraud framework
Areas to consider
• Organizational tone
Management information• Management information
• Communication and training
• Risk identification• Risk identification
• Control linkage and evaluation
• Preventive controlsPreventive controls
• Monitoring and auditing
• Incident response and remediationp
Fraud in a Downturn • A review of how fraud and other integrity risks affect business 24
24. About PwC Forensic servicesAbout PwC Forensic services
Fraud Prevention and Detection Experience
• PwC is a leader in the prevention, investigation and remediation of fraud.
• We have invested over 100,000 hours researching common, sector- and market-specific misconduct
h i l i f d l t ti t i i ti d i i l d tschemes involving fraudulent reporting, asset misappropriation, and criminal conduct.
• Our risks and controls professionals developed manuals detailing the mechanics, controls, risk indicators
and detection procedures for hundreds of fraud scenarios, which are tailored to specific client needs
and circumstances.
• Hundreds of companies have used our anti-fraud framework—which has been embraced by COSO, SEC,
IIA, and the AICPA—to benchmark the effectiveness of efforts to guard against misconduct.
Contact Us
K i ti RiKristin Rivera
Partner
kristin.d.rivera@us.pwc.com
Tel: (415) 498-6566
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