Any other thoughts or guidance on getting started in fincrime careers to share?
The most common triggers of fraud are greed and lifestyle. Fraud and corruption are interrelated.
Some of the major types of fraud include asset misappropriation such as cash, non-cash, fraudulent disbursement, false insurance claims, credit card fraud, false government benefit claims and others.
Asset and revenue overstatement or understatement, bribery and fraudulent expense claims are also considered to be fraud. Fraud can happen anywhere, whether at home or abroad.
Fraud is equal to dishonesty and it’s difficult to identify.
Consequently, fraud policy should be in place as a key component of any existing compliance program.
But, surprisingly, what can be a fraud’s greatest ally? The company itself.
For instance, when management chooses not to believe or wants to know, or even investigates any further a potential instance of impropriety, but rather keep the details from emerging for fear of financial or reputational harm.
It’s just because they didn’t want to get blamed or be targeted in any lawsuit.
For example, one of the instances this occurred is the Enron case. I think that management should have engaged in more robust risk management practices to detect the root cause and the next potential risk.
One can be involved in fraud unknowingly just due to lack of understanding or knowledge.
Organizations are encouraging the use of whistleblower programs related to the reporting and detection of unethical behaviors or any conduct that’s considered inappropriate in the workplace.
Humans make mistakes, whether intentional or unintentional, but the reality is their behavior of misconduct will harm others.
Why do people act unethically? Perhaps too much pressure, an “everyone is doing it” mentality? Pressure from the management or the internal cultural norm diverges from industry best practices?
There are many reasons, both internal and external, personal and professional.
Internal Controls should be the foundation of a firm’s governance structures and will amplify the operation’s ability to manage and monitor risk effectively, and also be in compliance with applicable laws and regulations, including those that fight fraud, money laundering and corruption.
Policies and procedures should be in place to safeguard a firm’s assets, to provide accurate financial reporting, security and Integrity in order to achieve the organization’s objectives and goals.
The importance and benefits of audits are manifold: monitoring, auditing, testing, and periodic evaluations of anti-corruption compliance programs in order to detect criminal conduct.
In addition, its ability to frequently evaluate the effectiveness of a compliance program in an organization. Internal auditors are the eyes and ears of the audit committee – a powerful ally to find compliance gaps before regulators are at the door.
These groups should work in concert with external audit teams, which typically focus on how organizations identify risks relevant to any fraudulent financial reporting and to ensure that capital markets information is delivered to investors, clients, shareholders and partners in an accurate way.
In sum, I believe that the compliance policies and procedures cannot be excluded from the firm’s governance framework and cannot act in a silo.
The purpose of compliance is not just to focus on individual areas and program elements, but to act in coordination and engage in information sharing across finance, IT, operations, legal, internal audit and human resources.
Therefore, firms must engage in effective internal controls.
If an organization fails to prevent fraud and corruption, as a result, it can have significant legal, financial and reputational consequences.