Fraud’s Worst Enemy: a Strong Code of Ethics

Fraud’s Worst Enemy: a Strong Code of Ethics

" three best practices of companies that know how to make ethical profits and fend off fraudsters:

1. Design and enforce a comprehensive fraud prevention policy and code of ethics. Ensure that every employee attends refresher training annually to stay abreast of new risks in a constantly changing business environment. Establish and publicize confidential reporting mechanisms.
2. Obtain unequivocal, ongoing C-suite and middle management support for the anti-fraud regime and ethics program.
3. When abuse or neglect is certain, fully enforce the ethics code and anti-fraud policies and procedures, regardless of the offender’s rank. Likewise, investigate allegations promptly and thoroughly, following up with enforcement when suspicions prove true. Bear in mind that the significance of minor offenses may be more symbolic than substantive. In such cases, when termination is inappropriate, alternatives such as temporary demotion or closer supervision can demonstrate management’s commitment to enforcement without depriving the organization of an otherwise valuable employee."
I think that each entity whether it is a private or public sector one should invest appropriately in instilling those ethics that help it avoid fraud and corruption and enhances its profit. It is always true that tone is at the top.

James R. Doty Says Audit Firms May Have to Be Rotated - NYTimes.com

James R. Doty Says Audit Firms May Have to Be Rotated - NYTimes.com

"Financial statements often include many estimates, and auditors now simply conclude whether an estimate is or is not reasonable. That has been a problem in valuing some securities that rarely trade, with the same audit firm approving widely varying estimates by different clients. One possibility may be for disclosures to be made on the range that the auditor deemed reasonable, and where the estimate fell within that range"

In my opinion, The problem is more complex than it seems. changing auditors is good but not enough. The issue is what are the motives and incentives that drives audit firms' negligent behavior, conflict of interest, and fraudulent acts.

Not enough being done to tackle fraud claims report | News | Inside Housing

Not enough being done to tackle fraud claims report | News | Inside Housing

According to the survey the public sector has adequate measures in place to tackle fraud after losses have been incurred, but identified areas where improvements to pre-emptive counter fraud activities could be made

The report discovered that fewer than 50 per cent of public sector bodies accurately estimated the cost of fraud, making the crime difficult to address.

Among central government organisations, it was also found that in more than half of them counter fraud staff do not receive any professional training.

This has caught out some providers with weaknesses in internal controls and the amounts lost can be significant. New scams are always appearing, it is therefore important that providers put systems in place to help safeguard themselves against the risk of fraud.