Regulators and financial intelligence units are tasked with challenging jobs to fight money laundering and terrorism financing, but some have room for improvement. Financial institutions observe that some regulators and units give unfavorable audit reports not necessarily due to legal breaches, but because of subjective methods rather than proper risk assessment. Excessive compliance costs are incurred without clear evidence that they reduce financial crimes. Regulators and units should ensure regulatory actions have benefits exceeding costs to avoid counterproductive policies. Proper risk understanding and mitigation is important over prescriptive rules and one-size-fits-all approaches.
Corporate Failures - Causes and Remedies.pptxssuser07cba1
The Economic cost of business failure is relatively large, Government, providers of capital, as well as management and employees are severely affected. More critical are the reporting accountants who are likely to face potential litigation if their report failed to provide an early warning signal.
Apart from profit making objective, all corporate business concerns share one fundamental objective which is to remain as going concern.
As businesses strive hard to perpetuate, one of the most significant threats irrespective of their size and nature of operation is illiquidity and insolvency. Extant evidence shows that in past decades business failures have occurred in higher rates than at any time.
The disastrous and social effects of corporate failure makes it imperative for shareholders, creditors, government, etc. to continually monitor the operations of a corporate entity in order to avoid possible failure. The main focus of this presentation is to consider the causes and remedies of corporate failure.
The ever increasing regulations and expansion of organisations across the globe into new markets exposed the organisations to greater regulatory and compliance risks. To Know More : https://www2.deloitte.com/in/en/pages/audit/articles/internal-audit.html
This document discusses two studies that examined gender bias in appointing headteachers. The first study found that governors exhibited gender bias that contributed to fewer women being appointed as headteachers. The second study, the Talented Leaders programme, removed governors from the selection process. In this study, 44.8% of applicants were women and 45% of those selected were women, showing no gender bias when governors' views were eliminated. The conclusion is that removing governors' preconceptions about who makes a good headteacher allows for more objective selection and equal success rates between male and female applicants.
Restoring Your Organization's Reputation after Financial FraudCBIZ, Inc.
Organizations that fail to grasp the implications of the public relations frenzy that is certain to follow the occurrence of fraud will suffer the lost confidence of its stakeholders and supporters. These four steps will guide a successful response.
The role of audit committees continues to expand to keep pace with the modern business operating environment. In addition to responsibility for a company’s financial reporting and management, audit committees increasingly take an active role in an organization’s risk management strategy.
Audit committees can be instrumental in helping their organizations implement procedures to address the challenges they face. They can also assist with addressing internal and external audit findings or with exploring best practices for addressing areas of operations that may be vulnerable to disruption or extraordinary risks.
Integrity is a core value for businesses. Dishonest behaviors like fraud can severely damage an organization's reputation and finances. HR professionals play an important role in preventing corporate fraud through measures like verifying candidates' backgrounds, educating employees on ethics policies, and establishing reporting systems for suspicious activities. If fraud occurs, HR should handle it carefully and potentially involve outside experts to investigate properly and minimize further losses.
Whitepaper: Misconduct Rarely Happens in Isolation: How You Can Detect Critic...Gradytl
The whitepaper discusses how misconduct often goes undetected at organizations until it is too late. While employees report issues to local managers, the information does not get escalated or documented properly. This allows small isolated incidents to accumulate without the organization's awareness. The whitepaper argues that organizations already have the necessary data in employee reports but lack centralized systems to analyze trends across different locations. An integrated case management system is proposed to document incidents in a consistent way and allow information sharing between departments to detect broader patterns of misconduct before major issues emerge.
Regulators and financial intelligence units are tasked with challenging jobs to fight money laundering and terrorism financing, but some have room for improvement. Financial institutions observe that some regulators and units give unfavorable audit reports not necessarily due to legal breaches, but because of subjective methods rather than proper risk assessment. Excessive compliance costs are incurred without clear evidence that they reduce financial crimes. Regulators and units should ensure regulatory actions have benefits exceeding costs to avoid counterproductive policies. Proper risk understanding and mitigation is important over prescriptive rules and one-size-fits-all approaches.
Corporate Failures - Causes and Remedies.pptxssuser07cba1
The Economic cost of business failure is relatively large, Government, providers of capital, as well as management and employees are severely affected. More critical are the reporting accountants who are likely to face potential litigation if their report failed to provide an early warning signal.
Apart from profit making objective, all corporate business concerns share one fundamental objective which is to remain as going concern.
As businesses strive hard to perpetuate, one of the most significant threats irrespective of their size and nature of operation is illiquidity and insolvency. Extant evidence shows that in past decades business failures have occurred in higher rates than at any time.
The disastrous and social effects of corporate failure makes it imperative for shareholders, creditors, government, etc. to continually monitor the operations of a corporate entity in order to avoid possible failure. The main focus of this presentation is to consider the causes and remedies of corporate failure.
The ever increasing regulations and expansion of organisations across the globe into new markets exposed the organisations to greater regulatory and compliance risks. To Know More : https://www2.deloitte.com/in/en/pages/audit/articles/internal-audit.html
This document discusses two studies that examined gender bias in appointing headteachers. The first study found that governors exhibited gender bias that contributed to fewer women being appointed as headteachers. The second study, the Talented Leaders programme, removed governors from the selection process. In this study, 44.8% of applicants were women and 45% of those selected were women, showing no gender bias when governors' views were eliminated. The conclusion is that removing governors' preconceptions about who makes a good headteacher allows for more objective selection and equal success rates between male and female applicants.
Restoring Your Organization's Reputation after Financial FraudCBIZ, Inc.
Organizations that fail to grasp the implications of the public relations frenzy that is certain to follow the occurrence of fraud will suffer the lost confidence of its stakeholders and supporters. These four steps will guide a successful response.
The role of audit committees continues to expand to keep pace with the modern business operating environment. In addition to responsibility for a company’s financial reporting and management, audit committees increasingly take an active role in an organization’s risk management strategy.
Audit committees can be instrumental in helping their organizations implement procedures to address the challenges they face. They can also assist with addressing internal and external audit findings or with exploring best practices for addressing areas of operations that may be vulnerable to disruption or extraordinary risks.
Integrity is a core value for businesses. Dishonest behaviors like fraud can severely damage an organization's reputation and finances. HR professionals play an important role in preventing corporate fraud through measures like verifying candidates' backgrounds, educating employees on ethics policies, and establishing reporting systems for suspicious activities. If fraud occurs, HR should handle it carefully and potentially involve outside experts to investigate properly and minimize further losses.
Whitepaper: Misconduct Rarely Happens in Isolation: How You Can Detect Critic...Gradytl
The whitepaper discusses how misconduct often goes undetected at organizations until it is too late. While employees report issues to local managers, the information does not get escalated or documented properly. This allows small isolated incidents to accumulate without the organization's awareness. The whitepaper argues that organizations already have the necessary data in employee reports but lack centralized systems to analyze trends across different locations. An integrated case management system is proposed to document incidents in a consistent way and allow information sharing between departments to detect broader patterns of misconduct before major issues emerge.
Dr haluk f gursel, verifying the accountability of public servantsHaluk Ferden Gursel
Private Citizens, eager for accountability, are asking for a transparency in the changes in income and assets/fortunes of politicians and high level civil servants, accumulated while they are at the service of community.
Public opinion does not tolerate the illicit enrichment and conflict of interest, while on duty. For example, to obtain assurances of lack of fraud and corruption by politically exposed persons (PEP) is on the rise everywhere. A PEP is defined as someone who, through their prominent position or influence, is more susceptible to being involved in bribery or corruption. In addition, any close business associate or family member of such a person will also be deemed as being a risk, and therefore could also be added to the PEP list.
BUS661-WEEK 3-DISCUSSION QUESTIONS-ASSIGNMENT –Instructor Guidance- Leading Organizational Change MFV1314A
WEEK 3
Week 3 Objectives-instructor guidance-
· Outline key reasons for resistance to change and propose actions that can be taken to reduce resistance.
· Discuss key driving forces and steps of the change process.
· Evaluate the importance of communication in the change process and the overall effectiveness of the change initiative.
· Demonstrate knowledge of the change process.
In week two, we considered the internal and external pressures associated with change within the law enforcement profession. Continuing with this example we will consider/propose actions that can be taken to reduce resistance to change with the law enforcement profession.
Across the country, crime analysts are compiling statistics that record and identify trends in crime. In theory, law enforcement managers can use these statistics to determine the best way to disperse the personnel within the agency to address specific crimes. There is an inherent flaw with this method for managing the delivery of police services to the community. The implementation of accountability programs are often thought of by management as a means of increasing officer productivity and motivating otherwise disinterested officers. The associated problem with the use of accountability programs are that law enforcement officers learn how to manipulate the statistics without truly accomplishing the goals of the agency. Subsequently the officers who learn how to manipulate these accountability systems are looked upon as the example. As a result, law enforcement managers must identify or develop proven methods to motivate officers to buy in to the vision and goals of the organization.
Contrary to the traditional methods of policing, accountability programs “adopt the managerial techniques and administrative structures of private for-profit corporations, emphasizing cost control, efficiency, decentralization of management and the cutting back of the public sector, while creating a market or quasi-market mechanisms, contracting out, performance indicators, risk assessment, and audit procedures.” (Chan, 1999) As managers continue to implement these types of programs within the law enforcement profession, officers who typically enjoy a considerable amount of freedom are now confronted with a micromanagement style of leadership. This often results in feelings of resentment, hostility, and distrust as management is pitted against front-line employees. To offset this hostility, officer’s gradually fall into several distinct categories. Those who produce at lower-levels, those who learn to manipulate the statistics utilized by supervisors to measure performance, and those who continue to work at previously established levels. Each of these situations creates a challenge for managers to deal with in terms of motivation. It would not be plausible to motivate each group of officers ...
NEMEA Compliance Center - the most powerful survey creation, management, and reporting solution available. It intuitively collects responses, writes, and produces standardized regulatory compliance reports. In fact, it even supports the use of many different standards at once. Our compliance software has a fully featured user-interface that lets you rapidly compare the laws and regulations that govern your industry and business.
EFFECTS OF ETHICS ON FRAUD 1
EFFECTS OF ETHICS ON FRAUD 2
Ethical Analysis
Effects of ethical behaviors in an economy are far reaching to individuals, firms and the economy at large. Accountants play a vital role in ensuring the reliability and trustworthiness of accounting data and affect the moral culture of business and society. In order to achieve this, accountants are advised to observe the American Institute of Certified Public Accountants (AICPA), Professional Code of Conduct. Undoubtedly, private and public organizations employ professional accountants who are mandated to provide financial information regarding its business cycles. In some situations, an accountant may feel compelled or pressured to provide false financial information or alter financial results. In these cases, this creates a threat to the moral and ethical character of an accountant and is known as an ethical dilemma. Ethical dilemmas constitute a circumstance in which an individual faces a situation or a decision that test his/her moral system or ethical code. In these circumstances, an individual must choose whether to live out consistent moral attitudes or act contrary to what one personally believes or what has been established by ethical code. Ethical accounting codes require accountants to have a high level of integrity, to maintain confidentiality and behave according to a high degree of professional standards.
This dissertation will discuss how ethical accounting standards impact accounting fraud. Accounting fraud involves the intentional manipulation of financial information, which misleads shareholders, creditors, investors and the general public. These actions are premeditated attempts to deceive and attract investors by intentionally altering financial statements. Often, this is accomplished by overstating revenue and assets and under reporting expenses and liabilities. The perpetrators of accounting fraud are employees, managers, accountants and top executives. Thus, to reduce business fraud, ethical codes have been instituted within corporations, industries and state and national accounting boards. For certified public accountants, the AICPA Code of Professional Conduct has been adopted to tackle the ethics of accounting.
Professional Conduct Diminishes Fraud
An accountant’s professional conduct is a key quality used to minimize fraud. As mentioned, state accountancy boards and the AICPA are mandated to formulate and enforce professional standards for all accounting members who are responsible for providing financial services. The AICPA Code of Professional Conduct was recodified in June 2014, and became fully effective in December 2015. This code of conduct requires all accountants to act with integrity, due care, objectivity, competency and ensure confidentiality for their client. In ad.
Vigilance refers to keeping careful watch to avoid potential dangers or issues. For organizations, it means monitoring employee activities to promote integrity and honesty. Vigilance is important to curb unethical behaviors by individuals that can waste resources and damage an organization's reputation. It helps discipline wrongdoers, protect honest employees, increase transparency, and foster a culture of honesty. Vigilance functions are carried out through preventative measures like simplifying rules, improving accountability, and educating employees, as well as reactive investigations and disciplinary actions in response to detected corruption. It is a management tool that can improve organizational performance, efficiency, and effectiveness.
In a post-Financial Services Royal Commission (Hayne Royal Commission) world, the
regulatory landscape has changed fundamentally. The twin peaks model remains, but
the approach to enforcement is now summed up by the phrase, ‘adequate deterrence of
misconduct depends upon visible public denunciation of misconduct’.
ASIC has a new, more intensive supervisory approach—close and continuous monitoring
involves regularly placing ASIC staff onsite in major financial institutions to closely monitor
governance and compliance with laws. If successful, this program may be rolled out more
broadly. Its supervisory initiative, the Corporate Governance Task Force is undertaking
targeted reviews of corporate governance practices in large listed entities to allow it to
shine a light on ‘good’ and ‘bad’ practices observed across these entities.
Following a review of its enforcement strategy APRA has adopted a ‘constructively tough’
enforcement appetite. The Government has foreshadowed an extension of the Banking
Executive Accountability Regime (BEAR) beyond the banking sector
While many organisations have implemented a whistleblowing mechanism, our survey findings indicate that there has not been a significant investment in the implementation of these, and there is a lack of awareness as well.
This document discusses issues arising from a case study on the African Peer Review Mechanism (APRM), a body formed to encourage good governance. The main issues discussed are whistleblowing, values, management, and fraud. Whistleblowing can benefit organizations by exposing misconduct but whistleblowers often face retaliation. Values are important but were not properly implemented at APRM. Management failed to establish proper policies and oversight, allowing fraud to occur under the APRM's acting director Assefa Shifa, who refused an audit and misused funds. Recommendations include strengthening whistleblower protections, using principles instead of vague values, requiring internal audits, and rotating external auditors to prevent improper relationships from forming.
Dubai and Hawkamah to develop Corporate Governance CodesAndres Baytelman
The government of Dubai has engaged Hawkamah, the regional institute for corporate governance, to develop a corporate governance framework for small and medium enterprises (SMEs) in Dubai. SMEs dominate Dubai's business landscape but lack stringent regulations, making them prone to fraud and illegal activities. The new corporate governance code aims to improve transparency, accountability, and protection of minority shareholders among SMEs. Hawkamah will focus on appointing independent directors, clarifying board responsibilities, enhancing transparency of financial disclosures, reducing unnecessary information in reports, and strengthening internal controls and independent auditing. The goal is to establish sound corporate governance that fosters stable growth and attracts more investment in Dubai's S
Dubai and hawkamah to develop corporate governance codeAndres Baytelman
The government of Dubai has engaged Hawkamah, the regional institute for corporate governance, to develop a corporate governance framework for small and medium enterprises (SMEs) in Dubai. SMEs dominate Dubai's business landscape but lack stringent regulations, making them prone to fraud and illegal activities. The new corporate governance code aims to improve transparency, accountability, and protect minority shareholders through measures like appointing independent directors, clearly defining board responsibilities, improving financial disclosure, and establishing internal controls. The goal is to boost investor confidence and support Dubai's continued economic growth.
Corporate Fraud & Corruption Annual Review 2016 - entrevista a Rafael HuamánEY Perú
El Corporate Fraud & Corruption Annual Review 2016 es una publicación de Financier Worldwide, en la que se presentan las opiniones de profesionales líderes alrededor del mundo acerca de las últimas tendencias en fraude corporativo y corrupción.
Esta edición cuenta con una entrevista a Rafael Huamán, Socio Responsable del Área de Anticorrupción y Prevención de Fraude de EY Perú.
Audits have changed their traditional focus from cost control towards a global strategy of risk management, governance, value creation, and organizational culture. Auditing is a representative element of corporate culture because it defines how companies think and act, but manage decisions are the true reflection of how a company thinks and acts. Thus, this area expands its importance thanks to its direct participation in risk management and value creation.
The article discusses how good corporate governance is important for banks' financial performance and long-term sustainability. It argues that banks with strong corporate governance practices tend to have higher profitability and lower costs of capital. Ensuring proper oversight of management and clear accountability helps minimize risks and maintains stakeholder trust, benefiting the bank's financial position.
The document discusses the evolution of the finance function from the 1960s to present and future. It describes how the finance function has transformed from a focus on "creative accounting" and scorekeeping to prioritizing compliance, efficiency, decision support, and becoming a business partner. The future of finance is outlined as providing predictive insights into performance, growth, and risk to help drive business decisions as a true strategic partner. Finance is utilizing new technologies and analytical skills to integrate diverse data sources and provide real-time insights beyond just financial data.
Ahead of the marcus evans National Healthcare CFO Summit 2022, read here an interview with Rick Reid where he discusses what strategies healthcare CFOs can implement to improve the financial situation of their facilities.
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
Fraud, bribery and corruption: Protecting reputation and valueDavid Graham
In support of International Fraud Awareness Week, Deloitte Risk Advisory has published a series of articles, the second of which has been introduced below. This article lists ten areas that executives and the audit committee should evaluate to help mitigate reputational risks of fraud, bribery and corruption
This document summarizes challenges faced by small and medium enterprises (SMEs) in Italy regarding risk management, auditing, and compliance. It notes that many SMEs do not see the value in implementing formal internal control systems beyond what is legally required. The document argues that some basic organizational tools are important for running a business efficiently and adapting to changes. It stresses the need for SMEs to define roles, responsibilities, and processes to enable internal auditing and compliance and recommends a gradual approach to organizational changes.
Given that CPAs do not agree with the changed expectations of their.pdfanandf0099
Given that CPAs do not agree with the changed expectations of their role, and the limits on the
auditor\'s possible role in controlling fraud, other considerations in the prevention and detection
of corporate fraud should be discussed. These include managerial controls, employee screening,
forensic accounting, and others.
Managerial Controls. Organizations with one hundred or fewer employees have the greatest
median losses per capita. The primary reason for this is because internal controls are less
sophisticated and stringent in smaller organizations. So what, if any, are management%u2019s
responsibilities when it comes to the prevention or detection of fraud? Annual reports of
management clearly state that management is responsible for the preparation and integrity of the
financial information presented, and the company and management maintain a system of internal
controls to provide for administrative and accounting controls. All professional literature makes
it clear that the responsibility of internal controls, proper reporting, and the adoption of sound
accounting policies rests solely with management, not the auditors.
To combat the problem of fraud, a crucial element in deterring theft is strict internal controls,
segregation of duties, and separation of functions. For example, simple procedures such as not
letting the person writing the checks reconcile the bank statement, not letting the receiving
department maintain physical inventory records, not letting the person initiating the purchase
order approve the payment, and not letting the person maintaining the personnel database also
issue payroll checks, may help separate incompatible functions within a business. Thus, internal
controls may be strengthened and fraud deterred by separation of functions.
Screening. Another element to combat fraud is adequate employee screening. Although this
statement might seem obvious, a good rule to follow to minimize the risk of fraud is to hire
honest employees. There are many organizations specializing in pre-employment screening.
These screening tests include lie detector and drug tests and fingerprinting of employees.
Through adequate background checks of information on resumes and applications, an employer
can elicit significantly more information and determine if the original information is accurate.
Organizational Climate. A third component to deterring fraud is creating a business environment
that reduces the perceived need of a pressured employee to commit fraud. This environment
includes creating open and consistent communications for hiring, evaluating employee
performance, and assessing employees for promotion. These factors, along with counseling
programs and employee enrichment efforts, might curtail the perceived need of an employee to
commit fraud.
Others. Finally, a few additional components to business fraud prevention include setting up a
hotline whereby fellow employees can report improper conduct, having a high level employee
.
Whistle blowing and financial reporting key issues andSowmya S Gowri S
Whistleblowing involves employees reporting wrongdoing, such as financial mismanagement or corruption. It helps ensure transparency and integrity in financial reporting. Effective whistleblowing policies within organizations, that protect anonymous reporting and whistleblowers, can help establish strong internal controls and corporate governance. Without such policies, employees may make external whistleblowing disclosures that damage the organization.
Dr haluk f gursel, verifying the accountability of public servantsHaluk Ferden Gursel
Private Citizens, eager for accountability, are asking for a transparency in the changes in income and assets/fortunes of politicians and high level civil servants, accumulated while they are at the service of community.
Public opinion does not tolerate the illicit enrichment and conflict of interest, while on duty. For example, to obtain assurances of lack of fraud and corruption by politically exposed persons (PEP) is on the rise everywhere. A PEP is defined as someone who, through their prominent position or influence, is more susceptible to being involved in bribery or corruption. In addition, any close business associate or family member of such a person will also be deemed as being a risk, and therefore could also be added to the PEP list.
BUS661-WEEK 3-DISCUSSION QUESTIONS-ASSIGNMENT –Instructor Guidance- Leading Organizational Change MFV1314A
WEEK 3
Week 3 Objectives-instructor guidance-
· Outline key reasons for resistance to change and propose actions that can be taken to reduce resistance.
· Discuss key driving forces and steps of the change process.
· Evaluate the importance of communication in the change process and the overall effectiveness of the change initiative.
· Demonstrate knowledge of the change process.
In week two, we considered the internal and external pressures associated with change within the law enforcement profession. Continuing with this example we will consider/propose actions that can be taken to reduce resistance to change with the law enforcement profession.
Across the country, crime analysts are compiling statistics that record and identify trends in crime. In theory, law enforcement managers can use these statistics to determine the best way to disperse the personnel within the agency to address specific crimes. There is an inherent flaw with this method for managing the delivery of police services to the community. The implementation of accountability programs are often thought of by management as a means of increasing officer productivity and motivating otherwise disinterested officers. The associated problem with the use of accountability programs are that law enforcement officers learn how to manipulate the statistics without truly accomplishing the goals of the agency. Subsequently the officers who learn how to manipulate these accountability systems are looked upon as the example. As a result, law enforcement managers must identify or develop proven methods to motivate officers to buy in to the vision and goals of the organization.
Contrary to the traditional methods of policing, accountability programs “adopt the managerial techniques and administrative structures of private for-profit corporations, emphasizing cost control, efficiency, decentralization of management and the cutting back of the public sector, while creating a market or quasi-market mechanisms, contracting out, performance indicators, risk assessment, and audit procedures.” (Chan, 1999) As managers continue to implement these types of programs within the law enforcement profession, officers who typically enjoy a considerable amount of freedom are now confronted with a micromanagement style of leadership. This often results in feelings of resentment, hostility, and distrust as management is pitted against front-line employees. To offset this hostility, officer’s gradually fall into several distinct categories. Those who produce at lower-levels, those who learn to manipulate the statistics utilized by supervisors to measure performance, and those who continue to work at previously established levels. Each of these situations creates a challenge for managers to deal with in terms of motivation. It would not be plausible to motivate each group of officers ...
NEMEA Compliance Center - the most powerful survey creation, management, and reporting solution available. It intuitively collects responses, writes, and produces standardized regulatory compliance reports. In fact, it even supports the use of many different standards at once. Our compliance software has a fully featured user-interface that lets you rapidly compare the laws and regulations that govern your industry and business.
EFFECTS OF ETHICS ON FRAUD 1
EFFECTS OF ETHICS ON FRAUD 2
Ethical Analysis
Effects of ethical behaviors in an economy are far reaching to individuals, firms and the economy at large. Accountants play a vital role in ensuring the reliability and trustworthiness of accounting data and affect the moral culture of business and society. In order to achieve this, accountants are advised to observe the American Institute of Certified Public Accountants (AICPA), Professional Code of Conduct. Undoubtedly, private and public organizations employ professional accountants who are mandated to provide financial information regarding its business cycles. In some situations, an accountant may feel compelled or pressured to provide false financial information or alter financial results. In these cases, this creates a threat to the moral and ethical character of an accountant and is known as an ethical dilemma. Ethical dilemmas constitute a circumstance in which an individual faces a situation or a decision that test his/her moral system or ethical code. In these circumstances, an individual must choose whether to live out consistent moral attitudes or act contrary to what one personally believes or what has been established by ethical code. Ethical accounting codes require accountants to have a high level of integrity, to maintain confidentiality and behave according to a high degree of professional standards.
This dissertation will discuss how ethical accounting standards impact accounting fraud. Accounting fraud involves the intentional manipulation of financial information, which misleads shareholders, creditors, investors and the general public. These actions are premeditated attempts to deceive and attract investors by intentionally altering financial statements. Often, this is accomplished by overstating revenue and assets and under reporting expenses and liabilities. The perpetrators of accounting fraud are employees, managers, accountants and top executives. Thus, to reduce business fraud, ethical codes have been instituted within corporations, industries and state and national accounting boards. For certified public accountants, the AICPA Code of Professional Conduct has been adopted to tackle the ethics of accounting.
Professional Conduct Diminishes Fraud
An accountant’s professional conduct is a key quality used to minimize fraud. As mentioned, state accountancy boards and the AICPA are mandated to formulate and enforce professional standards for all accounting members who are responsible for providing financial services. The AICPA Code of Professional Conduct was recodified in June 2014, and became fully effective in December 2015. This code of conduct requires all accountants to act with integrity, due care, objectivity, competency and ensure confidentiality for their client. In ad.
Vigilance refers to keeping careful watch to avoid potential dangers or issues. For organizations, it means monitoring employee activities to promote integrity and honesty. Vigilance is important to curb unethical behaviors by individuals that can waste resources and damage an organization's reputation. It helps discipline wrongdoers, protect honest employees, increase transparency, and foster a culture of honesty. Vigilance functions are carried out through preventative measures like simplifying rules, improving accountability, and educating employees, as well as reactive investigations and disciplinary actions in response to detected corruption. It is a management tool that can improve organizational performance, efficiency, and effectiveness.
In a post-Financial Services Royal Commission (Hayne Royal Commission) world, the
regulatory landscape has changed fundamentally. The twin peaks model remains, but
the approach to enforcement is now summed up by the phrase, ‘adequate deterrence of
misconduct depends upon visible public denunciation of misconduct’.
ASIC has a new, more intensive supervisory approach—close and continuous monitoring
involves regularly placing ASIC staff onsite in major financial institutions to closely monitor
governance and compliance with laws. If successful, this program may be rolled out more
broadly. Its supervisory initiative, the Corporate Governance Task Force is undertaking
targeted reviews of corporate governance practices in large listed entities to allow it to
shine a light on ‘good’ and ‘bad’ practices observed across these entities.
Following a review of its enforcement strategy APRA has adopted a ‘constructively tough’
enforcement appetite. The Government has foreshadowed an extension of the Banking
Executive Accountability Regime (BEAR) beyond the banking sector
While many organisations have implemented a whistleblowing mechanism, our survey findings indicate that there has not been a significant investment in the implementation of these, and there is a lack of awareness as well.
This document discusses issues arising from a case study on the African Peer Review Mechanism (APRM), a body formed to encourage good governance. The main issues discussed are whistleblowing, values, management, and fraud. Whistleblowing can benefit organizations by exposing misconduct but whistleblowers often face retaliation. Values are important but were not properly implemented at APRM. Management failed to establish proper policies and oversight, allowing fraud to occur under the APRM's acting director Assefa Shifa, who refused an audit and misused funds. Recommendations include strengthening whistleblower protections, using principles instead of vague values, requiring internal audits, and rotating external auditors to prevent improper relationships from forming.
Dubai and Hawkamah to develop Corporate Governance CodesAndres Baytelman
The government of Dubai has engaged Hawkamah, the regional institute for corporate governance, to develop a corporate governance framework for small and medium enterprises (SMEs) in Dubai. SMEs dominate Dubai's business landscape but lack stringent regulations, making them prone to fraud and illegal activities. The new corporate governance code aims to improve transparency, accountability, and protection of minority shareholders among SMEs. Hawkamah will focus on appointing independent directors, clarifying board responsibilities, enhancing transparency of financial disclosures, reducing unnecessary information in reports, and strengthening internal controls and independent auditing. The goal is to establish sound corporate governance that fosters stable growth and attracts more investment in Dubai's S
Dubai and hawkamah to develop corporate governance codeAndres Baytelman
The government of Dubai has engaged Hawkamah, the regional institute for corporate governance, to develop a corporate governance framework for small and medium enterprises (SMEs) in Dubai. SMEs dominate Dubai's business landscape but lack stringent regulations, making them prone to fraud and illegal activities. The new corporate governance code aims to improve transparency, accountability, and protect minority shareholders through measures like appointing independent directors, clearly defining board responsibilities, improving financial disclosure, and establishing internal controls. The goal is to boost investor confidence and support Dubai's continued economic growth.
Corporate Fraud & Corruption Annual Review 2016 - entrevista a Rafael HuamánEY Perú
El Corporate Fraud & Corruption Annual Review 2016 es una publicación de Financier Worldwide, en la que se presentan las opiniones de profesionales líderes alrededor del mundo acerca de las últimas tendencias en fraude corporativo y corrupción.
Esta edición cuenta con una entrevista a Rafael Huamán, Socio Responsable del Área de Anticorrupción y Prevención de Fraude de EY Perú.
Audits have changed their traditional focus from cost control towards a global strategy of risk management, governance, value creation, and organizational culture. Auditing is a representative element of corporate culture because it defines how companies think and act, but manage decisions are the true reflection of how a company thinks and acts. Thus, this area expands its importance thanks to its direct participation in risk management and value creation.
The article discusses how good corporate governance is important for banks' financial performance and long-term sustainability. It argues that banks with strong corporate governance practices tend to have higher profitability and lower costs of capital. Ensuring proper oversight of management and clear accountability helps minimize risks and maintains stakeholder trust, benefiting the bank's financial position.
The document discusses the evolution of the finance function from the 1960s to present and future. It describes how the finance function has transformed from a focus on "creative accounting" and scorekeeping to prioritizing compliance, efficiency, decision support, and becoming a business partner. The future of finance is outlined as providing predictive insights into performance, growth, and risk to help drive business decisions as a true strategic partner. Finance is utilizing new technologies and analytical skills to integrate diverse data sources and provide real-time insights beyond just financial data.
Ahead of the marcus evans National Healthcare CFO Summit 2022, read here an interview with Rick Reid where he discusses what strategies healthcare CFOs can implement to improve the financial situation of their facilities.
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
Fraud, bribery and corruption: Protecting reputation and valueDavid Graham
In support of International Fraud Awareness Week, Deloitte Risk Advisory has published a series of articles, the second of which has been introduced below. This article lists ten areas that executives and the audit committee should evaluate to help mitigate reputational risks of fraud, bribery and corruption
This document summarizes challenges faced by small and medium enterprises (SMEs) in Italy regarding risk management, auditing, and compliance. It notes that many SMEs do not see the value in implementing formal internal control systems beyond what is legally required. The document argues that some basic organizational tools are important for running a business efficiently and adapting to changes. It stresses the need for SMEs to define roles, responsibilities, and processes to enable internal auditing and compliance and recommends a gradual approach to organizational changes.
Given that CPAs do not agree with the changed expectations of their.pdfanandf0099
Given that CPAs do not agree with the changed expectations of their role, and the limits on the
auditor\'s possible role in controlling fraud, other considerations in the prevention and detection
of corporate fraud should be discussed. These include managerial controls, employee screening,
forensic accounting, and others.
Managerial Controls. Organizations with one hundred or fewer employees have the greatest
median losses per capita. The primary reason for this is because internal controls are less
sophisticated and stringent in smaller organizations. So what, if any, are management%u2019s
responsibilities when it comes to the prevention or detection of fraud? Annual reports of
management clearly state that management is responsible for the preparation and integrity of the
financial information presented, and the company and management maintain a system of internal
controls to provide for administrative and accounting controls. All professional literature makes
it clear that the responsibility of internal controls, proper reporting, and the adoption of sound
accounting policies rests solely with management, not the auditors.
To combat the problem of fraud, a crucial element in deterring theft is strict internal controls,
segregation of duties, and separation of functions. For example, simple procedures such as not
letting the person writing the checks reconcile the bank statement, not letting the receiving
department maintain physical inventory records, not letting the person initiating the purchase
order approve the payment, and not letting the person maintaining the personnel database also
issue payroll checks, may help separate incompatible functions within a business. Thus, internal
controls may be strengthened and fraud deterred by separation of functions.
Screening. Another element to combat fraud is adequate employee screening. Although this
statement might seem obvious, a good rule to follow to minimize the risk of fraud is to hire
honest employees. There are many organizations specializing in pre-employment screening.
These screening tests include lie detector and drug tests and fingerprinting of employees.
Through adequate background checks of information on resumes and applications, an employer
can elicit significantly more information and determine if the original information is accurate.
Organizational Climate. A third component to deterring fraud is creating a business environment
that reduces the perceived need of a pressured employee to commit fraud. This environment
includes creating open and consistent communications for hiring, evaluating employee
performance, and assessing employees for promotion. These factors, along with counseling
programs and employee enrichment efforts, might curtail the perceived need of an employee to
commit fraud.
Others. Finally, a few additional components to business fraud prevention include setting up a
hotline whereby fellow employees can report improper conduct, having a high level employee
.
Whistle blowing and financial reporting key issues andSowmya S Gowri S
Whistleblowing involves employees reporting wrongdoing, such as financial mismanagement or corruption. It helps ensure transparency and integrity in financial reporting. Effective whistleblowing policies within organizations, that protect anonymous reporting and whistleblowers, can help establish strong internal controls and corporate governance. Without such policies, employees may make external whistleblowing disclosures that damage the organization.
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This chapter discusses the political context in which public administrators operate. It focuses on three themes: 1) the structure of the three levels of government and their relationship to public administration, 2) the legislative branch's role in the policy process and oversight of agencies, and 3) the judiciary's role in reviewing agency actions and interpreting laws. The chapter examines the executive, legislative, and judicial branches at the federal, state, and local levels to help administrators understand their political environment.
The document discusses decision structures and Boolean logic in Python. It covers if, if-else, and if-elif-else statements for controlling program flow based on conditional logic. Relational and logical operators are explained for creating Boolean expressions to evaluate conditions. The chapter also discusses comparing strings, nested conditional structures, Boolean variables, and using conditional logic to determine turtle graphics properties and state in Python.
1. The document provides financial information for Berkshire Instruments and Harrod's Sporting Goods to calculate key ratios and determine the cost of capital. For Berkshire Instruments, the vice president is determining the weighted average cost of capital using different capital structure assumptions. For Harrod's, the CFO is analyzing the company's financial ratios to negotiate loan terms with their bank.
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How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
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2. McNeal, Andrea and Michelman, Jeffrey E., "CPAs' Role in
Fighting Fraud in Nonprofit Organization" (2006). Accounting
and Finance
Faculty Publications. Paper 8.
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MA AGE M E T
fra u d
CPAs' Role in Fighting Fraud
in Nonprofit Organizations
By Andrea McNeal and
j effrey Michelman
F raud in th e nonprofit sec tor ha been th e object of increas in
g
sc rutin y by th e U.S. Congress,
notably th e U.S. Senat e .... in ance
Committee, a well a by ew
York St ate Attorney General
Eliot Spitzer. Recent studies indi-
ca te that frauds occur in non -
profits of all sizes and in every
area of the counu'y with astound-
ing frequency. Furthermore. the
cost of the e fraud appears to be
increa in g at an alarming rate
(see Exhibit I ). With mall
organization uffering the mo t
ex treme losses from fraud and
embezzlements, mall , co mmu-
nity- based nonprofits mu st be
e pec ially dili gent in enacting
fraud prevention and detec tion
4. meas ure s. Sp ec ifi ca lly , good
board governan ce and internal
co ntrol poli cies in these organi-
za tion s are imperativ e to pre-
ve nt or miti ga te th e nega ti ve
impacts of fraudulent activity
within the organization. Financial
officer and CPAs advi in g
no n profits al 0 ha ve a role to
pl ay in facilitating and en uring
effective internal controls.
Board Governance
The implication of the Sarbane -Oxley
Act (SOA) for all organizations are far-
rangi ng. T ypi ca ll y, th e boards of mall
nonprofi t organizations tend to co mpri se
a few vo lunteer community members th at
kn ow each other well and ha ve es tab-
Ii hed a l eve l of tru st and rapport.
Additionally, non profi t boards freq uent-
ly experience a high turnover of mem-
ber , and individual that vo lunteer are
60
often untrained or unqualified to proper-
l y perfo rm the ove r si g ht function.
Combined, these factors can re ult in a
board that i unwilling or un abl e to a k
the tou gh questions necessary to detect
financial mi smanagement or fraud.
SOA req uires public companies to estab-
5. Ii h an independent audit committee with
th e presence of at lea t one "financia l
ex pert. " For nonprofits that undertake
ex ternal audits, implementing this provi-
sion represents an opportunity to enhance
the overs ight function and strengthen the
benefits received from the independent
audit. Many mall non profits, however,
lack the resources to conduct a full audit,
and therefore do not need a fonnal audit
committee.
The role of a CPA vo lunteer, even if
merely a an independent board member
providing check-s igning oversight, may be
critically impoltant in both substance and
form. Small nonprofits should still con-
sider retaining an independent accountant
to pelform a rev iew or compila-
tion of th e entit y's f inan c i al
record s to supplement any fraud
detection activities. Furthermore,
non profits that choose to forgo
an ex ternal audit should at least
establi h an independent finance
committee to oversee the organi-
zation 's financial employees and
transaction .
Gi ve n th e hi gh turn over of
board member and officers, a
well as the vo lunteer nature of
these position s. small nonprofits
may ex peri ence difficulty find-
6. in g vo luntee rs with adequate
business and financial qualifica-
tion . Furthermore, the turnover
of the e indi viduals makes con-
tinuity of oversight and fiscal ini-
tiati ve more difficult.
onetheless, nonprofits hould
attempt to engage "finan c i al
ex pert ," or at lea t financially
kno w ledgeabl e indi vidu al s, to
serve on the finance co mmittee.
Active in vo lvement of such indi -
vi duals in the oversight function
may provide additional scrutin y
and accountability for the financial offi-
cer and employees and therefore aid in
not only detecting, but also deterring,
fraudulent activity. Although nonprofits
may be stratifi ed into perhap three cat-
egori e - those rece i ving no CPA ser-
vices, those u ing CPA to comp lete a
rev iew, and tho e u ing a CPA to com-
plete a full audit - the ro le of the CPA
remai n important in all three in tances.
JANUARY 2006 / THE CPA JOURNAL
Internal Control Issues
Th e ci a ic fr aud tri ang le (Exhibit 2)
illu trates the three fac tor that are neces-
sary fo r a fraud to occ ur : press ures o r
7. incenti ves, rati onalization. and oppoltuni -
ty. Although the convergence of these fac-
to rs is what ult imate ly re ult in frauds,
orga ni zati o ns ca n add ress the 0 ppOltunity
co mpo ne nt , a nd thu s reduce the like li -
hood of fra udulent acti vi ty, by establi shing
adequate inte rn al contro ls.
Whil e every no nprofit faces its ow n
set of co ntro l cha lle nges a nd weakn ess-
es, sma ll community- based orga ni zati o ns
h ave c h a rac te r is ti cs th a t m a ke th e m
parti c ul a rl y uscepti ble to f ra ud . At the
fo refro nt of the prob le mati c cha racte ri s-
ti cs is the fac t th at th e e o rga ni za ti o ns
a re no t o nl y ove rsee n , b ut ge ne ra ll y
a lso run , o le ly o r la rge ly b y vo lun -
teers. The indi viduals res po nsible fo r car-
ry ing o ut exec uti ve and fin a nc ia l dutie
ofte n ha ve se pa rate full -time j o bs and
rece ive no co mpe nsati o n fo r ass umin g
th e e additi o na l re po n ibiliti es. A s a
result, the vo lunteers may not be as full y
co mmitted to the ta ks at hand a they
should be, and may therefore fa il to exer-
c ise a n adequ ate leve l of ca re in pe r-
formin g th e ir du tie . Additi o nall y, the e
vo l unt ee rs m ay rece i ve littl e o r n o
in struc ti o n o n the pro pe r pelfo rmance o f
the ir res po ns ibiliti e .
These defic ie nc ies in dedi cation a nd
trainin g can have di re conseq ue nces fo r
an y o rga ni za ti o n, and ma ny good , hon-
est vo lunteer may unknow in gly pelform
th e ir duti es in co rrec tl y. Furth e rm o re,
8. o me vo lunteers may neg li ge ntl y breeze
throu gh tas ks that deserve more attention,
resulting in fi nanc ial losses o r admini s-
trati ve diffi culties fo r the orga ni zati on. At
the far end of the spectrum , un scrupulo us
volunteers may ex pl o it these weakness-
es to the ir ad va ntage, as exempli fie d in
the First Coast Soccer Assoc iat io n case
(di scus ed in Exhibit 3). Indi viduals look-
ing fo r fra ud o ppOltuniti es w ill a lways
choose orga ni zati o ns w ith the ex pl o itable
co mbin a ti o n of hi g h po te nti a l rewa rd s
and a poo rl y impl e me nted inte rn a l co n-
trol tructure.
Because sma ll non profi t orga ni za ti ons
re ly so heav il y on the integrity and a bil -
ity of the ir vo lunteers, uc h e nti ties must
o bta in bac kground check, both crimin a l
and fin anc ia l, on all board me mbers and
JANUARY 2006 / THE CPA JOURNAL
EXHIBIT 1
Facts About Nonprofit Fraud
In a 2004 study of 508 occupational fraud cases*:
• 12.2% of the frauds occurred in the not-for-profit sector.
• The median loss of cases in not-for-profit organizations was
$100,000, up from
$40,000 in a similar study in 2002.
9. • Billing schemes were the most frequent form of fraud in not-
for-profit organi-
zations, accounting for 46.6% of the cases.
• 45.8% of the frauds occurred in organizations with fewer than
100 employees,
with a median loss of $98,000.
In a 2003 survey of more than 300 not-for-profit CEOs**:
• 62% said their board had not discussed the Sarbanes-Oxley
Act.
• Only 20% indicated that their board had implemented any
governance policy
changes as a result of the Sarbanes-Oxley Act.
• 77 % said they have a separate audit committee.
• Just 16% said they have a "whistle-blower" policy in place.
* Association of Certified Fraud Examiners, 2004 Report to the
Nation on
Occupational Fraud and Abuse.
** Grant Thornton LLP, National Board Governance Survey for
Not-far-Profit
Organizations (www.grantthornton.com).
EXHIBIT 2
The Fraud Triangle
10. Pressure/lncentive
Pressure on employees to
misappropriate cash or
other organizational assets.
Rationalization
Opportunity
Circumstances that allow an
employe e to carry out the
misappropriation of cash or
other organizational assets.
A frame of mind or ethical
character that allows
employees to intentionally
misappropriate cash or other
organizational assets and
justify their dishonest actions.
Sources: Occupational Fraud Abuse, by Joseph T. Wells, CPA,
CFE (Obsidian Publishing Co., 1997);
Fraud Examination, by W. Steve Albrecht (Thomson South-
Western Publishing, 2003).
61
officer, or at least on anyone handling
cash or other liquid asset. In many cases,
mall nonprofits that have suffered at the
hands of fraud ters wou ld have uncovered
11. previou s financial transgre sion s or pos-
sibl e fraudu lent motivation s simply by
conducting thorough background and ref-
erence check on the perpetrators prior
to hiring them.
Some organization may wish to go one
tep further and obtain fidelity bond to
cover those volunteers that will handle cash.
While fidelity bond coverage can mitigate
financial losses suffered due to fraud , orga-
nizations mu t be aware that mo t policies
require the nonprofit to establish and main-
tain sound accounting policies and proce-
dures, and may refu e to pay indemnities
if!hi requirement i not met Organization
hould aI 0 con ider implementing a pro-
gram to provide a certain level of finan -
cial-literacy education to board members and
employee with financial re pon ibilities.
Incorporating mandated training for indi-
Segregation of duties
may be difficult in small
organizations, but it is
especially crucial in
combating embezzlement
and fraud when many
transactions are
conducted in cash .
12. vidual with acce: to or oversight of the
nonprofit' funds enhances the ability of the
organization' volunteers to detect finan-
cial mi management
In addition, mo t mall nonprofit are
cash based, which can compound any i ues
or weaknes es present in the control envi-
ro nment. Marginally tempted employees
may find the acces ibility of ca h too
appealing and may engage in conduct that
they otherwi e would not. Con equently,
organization that receive much of their col-
62
EXHIBIT 3
Case Study: First Coast Soccer Association
Over a period of 22 months, Karen Edenfield was able to steal
more than
$80,000 from a community's children and their parents. As the
volunteer treasurer
of a Jacksonville, Florida, youth soccer association, she
managed the finances of
an organization that served more than 1,500 children and
collected funds in
excess of $400,000 annually. In this role, Edenfield's stated
responsibilities included
maintaining the records of the organization's funds, reconciling
all of the associa-
13. tion's bank accounts, and paying the debts of the association in
a timely manner.
During the last two years of her four years as treasurer,
Edenfield wrote more
than 100 checks to herself, to cash, and to vendors for personal
expenses.
Additionally, she set up a new "business" bank account for a
fake company with
the same initials as a legitimate socce r association payee, in
order to inconspicu-
ously siphon funds from the organization. She then transferred
the money from
this account to her personal account
Like many other frauds, the start of this embezzlement was
motivated by per-
sonal financial difficulties, resulting from the recent loss of her
previous job and
her husband's previous businesses failures. A background check
on Edenfield
would have revealed a history of financially questionable
situations, including
numerous bad-check charges and a large tax lien levied against
her husband
14. from a failed professional endeavor. However, the board of the
association did not
undertake such an investigation. Furthermore, although
Edenfield was required to
submit frequent budgetary and accounting reports to the assoc
iation's finance
committee, the board members knew each other well and
frequently exercised
only perfunctory oversight As a result, it took nearly two years
for the board to
become suspicious enough to undertake a thorough examination
of the organiza-
tion's finances .
Once under investigation, Edenfield admitted to the thefts,
although the full
amount was never determined, due in large part to the
organization's poorly kept
financial records. Additionally, Edenfield told the authorities
that the association's
president had suggested that she make use of the organization's
funds, and had
showed her how to do so without drawing attention. Very
shortly after Edenfield's
sentencing, the president was charged with embezzling $5,000.
15. Discussions with board members revealed that the occurrence
and duration of
the fraudulent activity were facilitated by a systemic failure in
the board gover-
nance process, due to two primary factors. First, parents,
particularly those serv-
ing as board members, were often afraid to ask pointed
questions for fear of a
retaliatory effect on their child's soccer playing time. Second,
cash payments to
many of the volunteers for the ir "service" had become an
accepted form of prac-
tice within the organization.
JANUARY 2006 / THE CPA JOURNAL
lections and pay many vendors in cash need
control in place to verify and oversee the
cash recei pt and di sbursement .
egregation of duties may be difficult in
small organizations, but it is especially cru-
cial in combating embezzlement and fraud
when many tran actions are conducted in
cash. If nothing else, the duties of handling
and reconciling fund hould al way be
egregated, with one party re pon ible for
16. approving di bursements, another for phys-
ically receiving and distributing fund, and
a thi rd for receiv ing bank statements and
performing the cash and bank reconcilia-
tion . Furthermore, checks should never be
igned in advance, and spec ial authoriza-
tion. such a dual signatures on checks,
should be required for cash di bursement
over a certai n dollar amount. While such
controls may not prevent a determined
fraudster. they decrease the opportunity for
di honest individual to embezzle the orga-
nization' s fund s, and may therefore deter
many improprieties. Accordingly. organ i-
zations mu t emphasize the importance of
ad herence to uch control to emp loyee
and board members. both during training
and throughout their tenure.
Responsibilities of the Accounting
Profession
Accounting profes ional s are in a unique
position to help small nonprofits fight fraud
(see Exhibit 4). Their ro le is threefold:
• A community member s. CPA
• Volunteer to be treasurer.
hould get invol ved with the organiza-
tion s they patronize and upport. By
attending board mee tin g. becoming
familiar with the organization's policie .
and a king tough que tion s of those in
17. charge, they can bring an outside ource
of accountability to the individual
responsib le for the organization' opera-
tion s and finances.
• B y vo lunteer in g to se rve as board
member for small nonprofits. CPA ca n
provide so me much - needed financial
expertise to the board governance f un c-
tion , and ca n faci litate the implementa-
tion of proper governance and internal
cont ro l policies throughout the organ i -
zation.
• e PAs hould give back to the nonprofit
ctor by acti ng in their professional capac-
ity. They can offer to perform pro bono
or reduced -fee as urance engagements, or
volunteer their time and proficiency to pro-
vide financial literacy and internal control
traini ng to the organization' board mem-
bers and emp loyee .
Andr ea McNeal, MAcc , CPA , is an
accounting writer /e ditor with th e
Association of Certified Fraud £mminers
ill Austill, Texas. J effrey Michelmall, PhD,
CPA , CMA , is an associate professor of
accoullting and information systems at
th e Ulliversity of North Florida ill
Jacksoll ville, Fla .
EXHIBIT 4
ePAs' Role in Good Board Governance
• Volunteer to chair the finance committee .
18. • Make sure that the organization has purchased adequate
directors' and officers' insurance.
• Require fidelity bonding for individuals handling cash.
• Require background checks on all employees handling cash or
working with children .
• Help identify high -risk areas of the organization.
• Volunteer to perform pro bono or reduced-fee audits, reviews,
or bookkeeping services.
• Volunteer to provide financial literacy and internal control
training to the organization's board members and employees.
• Become involved in hiring full-time staff as appropriate,
particularly those employees involved in the finance function .
JANUARY 2006 / THE CPA JOURNAL 63
University of North FloridaUNF Digital Commons1-2006CPAs'
Role in Fighting Fraud in Nonprofit OrganizationAndrea
McNealJeffrey E. MichelmanSuggested CitationTitle
Board Governance
Internal Control Issues
EXHIBIT 1 Facts About Nonprofit FraudEXHIBIT 2 The Fraud
TriangleEXHIBIT 3 Case Study: First Coast Soccer
AssociationResponsibilities of the Accounting
ProfessionEXHIBIT 4 CPAs' Role in Good Board Governance
2
Prepare a Conceptual Model
In the initial stages of a research project, an important first
19. step is to prepare a diagram that illustrates the research
hypotheses and displays the variable relationships that will be
examined. Specifically, a conceptual model is a diagram that
connects variables/constructs based on theory and logic to
visually display the hypotheses that will be tested. Preparing a
conceptual model early in the research process enables
researchers to organize their thoughts and visually consider the
relationships between the variables of interest. Conceptual
models also are an efficient means of sharing ideas between
researchers working on or reviewing a research project.
Two examples of conceptual models are shown in Exhibit 6-1.
The top model has two measured variables connected by a
single-headed arrow and is an example of a model of a bivariate
regression. The measured variables are represented as
rectangles and the arrow indicates that advertising budget is
related to or predicts sales. The model at the bottom of the
exhibit is more complex and represents a multiple regression
model, much like the one you are asked to prepare for your
Research Interest Overview. There are four measured variables
all represented as rectangles. The three measured variables on
the left are independent variables and the single measured
variable on the right is a dependent variable. Each independent
variable has an arrow that indicates that it is related to or
predicts the dependent variable sales. Thus, the model
indicates that sales is predicted by the advertising budget, the
number of salespersons, and the amount of website traffic. All
of these variables are measured with a single question and we
think of them as individual variables. Also, no signs (+/-) are
shown on the arrows to represent the orientation of relationships
between the independent and dependent variables. Therefore,
our hypotheses only show there is a relationship between the
variables, but not whether the relationship is positive or
negative (directional).
AD Budget
Sales
20. # Salespersons
Sales
AD Budget
Website Traffic
Exhibit 6-1 Conceptual Models of Measured Variables
The conceptual model in Exhibit 6-2 illustrates a more
sophisticated analysis of relationships. There are four variables
shown as ovals. In this situation, we refer to them as constructs
because each variable is considered as latent and not directly
measured. Instead, there are several questions that measure the
construct indirectly. Note that researchers sometimes use the
terms variable and construct interchangeably but constructs are
always measured indirectly by indicator variables.
To understand the model in Exhibit 6-2, the
variables/constructs must be defined. First, the construct
21. “Technology Acceptance Climate” is the extent to which
employees’ ongoing use of information technology is rewarded,
supported and expected within the organization. Although not
shown in the model, it is measured indirectly with several
questions (measured indicator variables). Second, the construct
“Shared Values” represents the feelings and beliefs that form an
organization’s culture and provide a basis for individuals to
understand the organization’s functioning and norms for
behavior. Examples of shared values include: customer
orientation, entrepreneurial values, adaptive cultural
expectations and information sharing norms. Thus, the shared
values construct is measured with several questions as well.
Third, “Technology Implementation” is how quickly and
completely the new information technology is integrated into
ongoing
operations and “Productivity” is higher output per day. The
Technology Implementation and Productivity constructs are
both measured with several questions as well.
Technology Implementation
Productivity
Technology Acceptance Climate
Shared Values
+
+
+
22. Exhibit 6-2 Four Construct Conceptual Model
The constructs “Technology Acceptance Climate” and
“Shared Values” are independent variables/constructs in the
conceptual model. In contrast, the construct “Productivity” is a
dependent variable. The construct “Technology
Implementation” is more complicated in the model because it is
both a dependent and an independent variable. In other words,
it is a dependent variable because it is predicted by two
independent variables (Implementation Climate and Shared
Values) but it also is an independent variable because it is
shown as predicting the construct Productivity.
Three hypotheses are illustrated by the arrows in this
conceptual model. They include: "Technology Implementation
is positively related to the Technology Acceptance Climate”,
"Technology Implementation is positively related to the
organization’s Shared Values", and “Productivity is positively
related to Technology Implementation.” There is a plus sign
(+) by all three arrows so all three relationships are represented
as directional and positive.
Note that constructs in all conceptual models are represented in
a sequence based on theory, logic or practical experiences
observed by the researcher. The sequence of the constructs is
illustrated from left to right, with independent (predictor)
constructs on the left and dependent (outcome) variables to the
right. That is, constructs to the left side are assumed to
precede and predict constructs to the right. When there are
more than two sets of constructs represented in a conceptual
23. model constructs on the right are always assumed to be
predicted by constructs on the left. Moreover, constructs
considered as dependent in a conceptual model often are
referred to as endogenous variables. Any construct that has an
arrow pointed into it is an endogenous variable. Constructs
that operate as both independent and dependent variables in a
model also are considered endogenous. Finally, constructs that
are always only independent variables are generally referred to
as exogenous variables. Exogenous variables (constructs) only
have arrows that point out of them and never have arrows
pointed into them. In Exhibit 6-2 Technology Acceptance
Climate and Shared Values are exogenous constructs. In
contrast, Technology Implementation and Productivity are
endogenous constructs.
The order of the constructs in the conceptual model shown in
Exhibit 6-2 is based on the following assumptions. In an
organization the climate of acceptance for new technology and
the shared values both influence the extent to which new
technology is implemented. Thus, implementation of new
technology is dependent on and predicted by the climate of
acceptance and shared values. Moreover, the Technology
Acceptance Climate and Shared Values constructs are referred
to as antecedents of technology implementation. In addition,
implementation of new technology is expected to lead to higher
productivity so the technology implementation construct is an
independent variable that predicts productivity, a dependent or
outcome construct.
When the sequence of the constructs has been decided, then the
connecting arrows representing the hypothesized relationships
must be drawn. The arrows are inserted with the arrow pointed
to the right, which indicates the sequence and that the
constructs on the left predict the constructs to the right. The
predictive relationships are sometimes referred to as causal
links, if the theory supports a causal relationship. If theory
does not support a causal relationship then the link between
constructs is considered a correlation. In connecting the
24. constructs with arrows all the possible connections may not be
included. For example, the model in Exhibit 6-2 does not have
an arrow between Technology Acceptance Climate and
Productivity, even though one could be drawn between the two
constructs. An arrow is not drawn there because theory does
not support such a relationship. Thus, arrows are drawn on
conceptual models only where theory or logic supports a
hypothesized relationship.
When you prepare your literature review you should
include a written description of your conceptual model as well
as an actual drawing of the model. The section of your
literature review that describes your model typically is called a
conceptual framework. The written description integrates all
the information about the problem/opportunity in a logical
manner, describes the relationships among the variables,
explains the theory underlying these relationships, indicates the
nature and direction of the relationships, and includes a
conceptual model. Exhibit 6-3 provides guidelines on how to
prepare a good conceptual framework.
Exhibit 6-3 Guidelines for Preparing Your Conceptual
Framework
· The variables/constructs considered relevant to the study are
clearly identified and defined.
· The sources of constructs are clearly identified. If new
constructs are developed for the study the process for
developing the constructs is explained, and their validity and
reliability reported.
· If published constructs are used, their validity and reliability
is reported for both the published study and for your own
research.
25. · The discussion states how the variables/constructs are related
to each other, i.e., which variables are dependent (endogenous)
or independent (exogenous).
· If possible, the nature (positive or negative) of the
relationships as well as the direction is hypothesized on the
basis of theory, logic, previous research or researcher judgment.
· There is a clear explanation of why you expect these
relationships to exist. The explanation cites theory, business
practice or some other credible source.
· A conceptual model or framework is prepared to clearly
illustrate the hypothesized relationships.
Research Interest Overview
Format Guide
· Writing your research paper:
· 1- Identify and define the problem.
· 2- Explain why the problem is important and how it makes a
contribution.
· 3- What is known about the problem? Conduct a literature
review.
· 4- Refine the problem – list independent and dependent
variables and develop a conceptual model.
· 5- Suggest ideas for date collection
· 6- Scholarly references.
26. Introduction
The research interest overview (RIO) is the second step in the
application process for admission to the DBA program. The
purpose of the RIO is to demonstrate your intellectual curiosity
and natural abilities in identifying phenomena in business
needing to be researched, find background literature and
theories to apply to these phenomena, and your writing and
communication skills in committing your research idea to paper.
This is a very important document in the application process so
please spend a significant amount of time preparing it.
The following represent some basic guidelines for the format of
the research interest overview. Perhaps the best advice is to
look at articles in academic journals in your area of interest and
use them as a guide for how to write your paper. While you are
limited in the specific sections you write, there is a lot of
latitude within each section to show your skills.
Format
Basics:
The document should be double-spaced in 12pt Times New
Roman font and left-justified. The footer should contain the
RIO title and the page number. Do not include your name in the
footer. The page limit for the body of the RIO is 12-15pages of
text (plus a single title page, a single abstract page, and
references). Papers over this length will not be considered.
Submit the paper as a Word document, not a PDF,
Sections:
The sections of the paper need to be clearly labeled. All of the
following sections must be included.
1. Title Page: In the upper right corner on a single page write
your first and last name, email address, area of interest, Cohort
7, and May 2015. Center ‘Research Interest Overview’ and the
27. title of your paper. Beneath the title toward the bottom of the
page, left-justify an ‘Author Note’ acknowledging all external
help received in preparing your RIO. Do not use a header or
other formatting techniques (see sample title page).
2. Abstract: The second page will be a short (50 word
maximum) summary of the RIO. At the top of the page, center
the title of the paper. Underneath the title, center the ‘Abstract’
heading.
3. Introduction: The paper begins with a basic description of
the phenomena being investigated and justification of why it
needs to be researched.
4. Literature/Theory review: You need to review relevant and
related scholarly research and theories on the phenomena using
proper citation format (refer to journals in your area for
guidance). Scholarly sources are journals – not trade
publications or newspapers, except perhaps, for example,
limited reference to the Wall Street Journal or similar
publication.
5. Theoretical model with research questions: In this section
you will provide a theoretical framework (conceptual model)
and identify at least 2 research questions of interest. Your
model should include 1 dependent variable and 2-3 independent
variables. This is a very important section in this paper so
invest time here. This section demonstrates how you can
conceptualize your ideas obtained from the literature/theory
review in a concise and visual way.
6. Data Collection: Describe how you will conduct your
research, including the proposed data collection approach.
Operationalization of variables is not required but highly
encouraged.
7. References:Follow APA style requirements as stated in the
APA Style Essentials Guide for all of the references used in
your RIO.