fraud risk: red flags in context
TRANSCRIPT
FRAUD RISK
risikoklar.org
RED FLAGS IN CONTEXT
Internal fraud (occupational fraud),
can be defined as:
“the use of one's occupation for personal
enrichment through the deliberate misuse
or misapplication of the organization's
resources or asset".
Association of Fraud Examiners (ACFE)
risikoklar.org
R I S I K O K L A R . O R G
Red Flags
R I S I K O K L A R . O R G
TONE AT THE TOP
INEFFECTIVE INTERNAL CONTROLS
DISCONNECT TOP AND GROUND
SUPPRESSION OF INTERNAL WHISTLEBLOWING
INEFFECTIVE & SLOW INVESTIGATIONS
EXTRINSIC MOTIVATIONJOB DISSATISFACTION
DISCONNECT POLICIES AND PRACTICES
CULTURE OF FEAR AND BYSTANDING
Corporateculture:Speak-updenied infavor ofcover-up
R I S I K O K L A R . O R G
organizationalculture of fearand apathy
internal controlweaknesses &internal auditineffectictive
governance &policies remainlifeless - staffdisengage &
mentally resign
R I S I K O K L A R . O R G
Models(and Limitations)
R I S I K O K L A R . O R G
c.f. ACFE: http://www.acfe.com/fraudtriangle.aspx
Rationalization
Opportunity
Pressure
Fraud Triangle(1973, Cressey)
R I S I K O K L A R . O R G
Opportunity
RationalizationPressure /Incentive
Capability
Fraud Diamond
(2004, Wolfe & Hermanson)
FraudTransparency
GoodGovernance
R I S I K O K L A R . O R G
R I S I K O K L A R . O R G
Systemic issues
Focus onMetrics -
[massaged]numbers vsqualitativeapproaches
Corruption assign of socialinstabilityand decay
Corruption assecret activity -Transparencyas panacea R I S I K O K L A R . O R G
Ethics trainingas abstractexercise ->
ethics-fatigue& disconnect