Corporate Resiliency: Managing the Growing Risk of Fraud and Corruption - Hardcover

Bishop, Toby J.; Hydoski, Frank E.

Hardcover

ISBN 10: 0470405171 ISBN 13: 9780470405178

Verlag: Wiley, 2009

Inhaltsangabe

Corporate Resiliency: Managing the Growing Risk of Fraud and Corruption is written for members of boards of directors and audit committees, senior executives, those who advise or report to them, and those responsible for managing fraud and corruption risks. It describes in plain English terms a proactive fraud and corruption risk management process that can enhance corporate resiliency. The authors provide practical insights and highlight traps to avoid. Quotes from their interviews of business executives provide international perspectives regarding changes in fraud and corruption risks and techniques companies are adopting to deal with them.

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Über die Autorin bzw. den Autor

Toby J. F. Bishop is the Director of the Deloitte Forensic Center for Deloitte Financial Advisory Services LLP in Chicago. A thought leader on fraud prevention and detection, named five times to Accounting Today's Top 100 Most Influential People in the Accounting Profession, he is the former president and CEO of the Association of Certified Fraud Examiners, the global professional body for anti-fraud specialists. He is a graduate of the University of Oxford.
 
Frank E. Hydoski is the leader of the Analytic and Forensic Technology practice of Deloitte Financial Advisory Services LLP. Internationally recognized for his work in complex investigations, he served as chief of forensics for the Independent Inquiry Committee into the United Nations Oil-for-Food Programme and led a key forensic effort in the investigation of Holocaust-era accounts held by Swiss banks. He is a graduate of San Diego State University and obtained his PhD from the University of Chicago.

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Praise for Corporate Resiliency: Managing the Growing Risk of Fraud and Corruption
 
"Fraud and corruption have been with us forever, but happily there is growing realization that these crimes undermine trust in government, companies, and markets alike. Toby Bishop and Frank Hydoski do not just recognize that problem, but clearly set out ways and means for dealing with it."
--Paul A. Volcker, former Federal Reserve Chairman and chairman of the President's Economic Recovery Advisory Board
 
"At a time of rising public demand for good corporate conduct, Corporate Resiliency is a welcome resource for those seeking to manage fraud and corruption risks. Toby Bishop and Frank Hydoski provide a highly operational road map for assessing risk and preventing, detecting, and responding to fraud and corruption when it does occur."
--Nancy Zucker Boswell, President and CEO, Transparency International - USA
 
"If you need a view of fraud and corruption from the top, this is your book. Bishop and Hydoski do an excellent job of explaining to executives why fraud and corruption are such serious issues for organizations, how we got where we are, and how to prevent and detect the devastating fallout from these crimes. A terrific read."
--Joseph T. Wells, CFE, CPA, founder and chairman, Association of Certified Fraud Examiners
 
"Corporate Resiliency offers managers and directors a holistic approach to the management of fraud and corruption risk that speaks to the same measure of productivity and profitability used in more conventional business processes. It walks the reader through the relationship among the board of directors, the audit committee, senior management, and staff in the process of fraud risk management, with a clear eye toward the intent and direction of fast-changing legislation and regulatory guidance."
-- From the Foreword by Mark G. Califano, Esq., Head of Litigation, GE Capital Finance
 
In today's global economy, fraud and corruption can more easily set off a chain of events resulting in serious financial and reputational loss. Corporate Resiliency reveals why resiliency in your company is not only just as crucial as innovation, customer-centricity, and competitiveness--it may be vital to your company's success.

Aus dem Klappentext

The twenty-first century global economy brings cheaper sources of supply and huge new markets, but also exposes companies to much greater risks and consequences of fraud and corruption. As a result of greater enforcement around the world, global media attention, and changing attitudes of consumers, fraud and corruption can now cost companies billions and destroy or severely damage their reputation.
 
Thought leaders Toby Bishop and Frank Hydoski argue that this scenario can make many companies more vulnerable to serious loss. They make a business case for boards and senior executives to adopt a fraud and corruption risk management strategy that can reduce vulnerability while increasing the ability to bounce back if fraud or corruption occurs.
 
Corporate Resiliency: Managing the Growing Risk of Fraud and Corruption is written for members of boards of directors and audit committees, senior executives, those who advise or report to them, and those responsible for managing fraud and corruption risks. It describes in plain English a proactive fraud and corruption risk management process that can enhance corporate resiliency.
 
The authors provide practical insights and highlight traps to avoid. Quotes from their interviews of business executives provide international perspectives regarding changes in fraud and corruption risks and techniques companies are adopting to deal with them.
 
This solutions-centered book discusses:
* Reducing risk management surprises through better fraud and corruption risk assessment approaches
* Using four different risk management strategies for the "Fears, Fires, Fleas, and Flaws" segments of your fraud and corruption risks
* Preventive and detective controls including continuous controls monitoring and transaction monitoring
* Preparing in advance for potential fraud and corruption investigations and remediation
* The roles of different parties in fraud and corruption risk management-including yours
* A corporate resiliency self-assessment tool you can use to assess your company
 
In the twenty-first century global economy, companies need to be more than smart and fast. They also need to be resilient. Corporate Resiliency shows you steps your company can take toward resiliency by identifying your fraud and corruption risks and deploying strategies for managing those risks proactively.

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Corporate Resiliency

Managing the Growing Risk of Fraud and CorruptionBy Toby J. Bishop Frank E. Hydoski

John Wiley & Sons

Copyright © 2009 John Wiley & Sons, Ltd
All right reserved.
ISBN: 978-0-470-40517-8

Chapter One

Can We Eliminate Fraud and Corruption?

Key points:

> Fraud itself cannot be eradicated, but fraud and corruption risks can be managed like other business risks.

> Fraud and corruption risk management strategies can help companies avoid some frauds and help them reduce the impact of frauds that occur.

> Resilient corporations focus more on strategies, not tactics, for managing fraud and corruption risks intelligently.

> In today's more brittle economy, fraud and corruption can more easily set off a chain of events resulting in significant loss for the companies affected.

Not a pretty picture

It is quite likely that fraud has existed in one form or another since the earliest days of organized societies. Despite the fact that it is illegal in most countries, despite the vigorous enforcement of anti-fraud laws in many countries, despite corporate self-policing, and despite significant attempts in many companies to create more ethical cultures, fraud continues to be an inevitable and unpleasant component of modern life.

Duleep Thomas, former senior vice president and general auditor at Wyndham Worldwide Corporation, describes this harsh reality this way, "Senior management needs to acknowledge that fraud can occur anywhere, at any time, and at any company. It is not okay to say, 'We operate in an environment of trust.' Once you accept this reality, then you need to understand where fraud could be perpetrated-both internally and externally-with respect to the business."

In general, fraud means taking financial advantage of another party through deception. Frauds affecting companies, the subject of this book, take a variety of forms. They can be threats from outside and carried out by members of the public. For example, they can be false claims made to a medical insurer, in which claims are made for injuries or ailments that the claimant does not suffer. They can also be threats from within and carried out by employees. An example of this would be procurement or vendor fraud, in which an employee sets up a false vendor in the company's accounts payable, then submits bills for goods or services, and collects payments in an account controlled by the employee.

One of the most dangerous form of fraud for a company occurs when the fraud is committed in the name of the company. Examples are misleading claims about products, offering returns on investment that can never be realized, or false financial statements designed to mislead analysts and investors.

Fraud prevention remains an imperfect art for most companies, with less than perfect results. Fraud in the corporate world, therefore, seems an inevitable fact. This is the result of several factors. First, we need to accept the reality that some people will resort to deception if they see an opening. Second, and building on this psychological fact, we need to recognize the lag in time between when schemes are invented and applied, and when they are detected and placed into the knowledge base that fraud prevention techniques rest on.

Third, there is also the difference between what is generally known about fraud schemes and prevention techniques, on the one hand, and what is known and practiced by a particular company, on the other. To stop the fraud schemes that are generally known requires that companies learn about them, evaluate the risks they pose, and diligently apply lessons learned.

The creativity of those who commit fraud seems inexhaustible. As a result, fraud itself can seem more like a disease than a simple criminal phenomenon. Its tendency to mutate suggests a cancer-like quality. Its ability to mask or change its appearance suggests some sort of predatory virus.

However, as we learn about fraud schemes and their characteristics, we can act to prevent them. A significant part of this book is devoted to strategies for applying knowledge about fraud in order to try to prevent it, and certainly to detect and limit the effects of schemes.

"It is unlikely that we will ever be able to eliminate fraud and corruption completely. In some societies, it is systemic," says our colleague Mary Jane Schirber. "The more we trade globally, the more likely we are to conduct business in countries with different social norms. It is natural for different cultures to have different customs, and it is important for us to remember that many of the rules we are accustomed to following are not followed everywhere."

That said, it is also important to remember that fraud often accompanies corruption (usually as a way of compensating for the money paid out as bribes) and that the true victims of fraud and corruption are usually innocent people.

"Instead of receiving fair value in a business transaction or exchange of goods, they are getting less than fair value in the form of shoddy products, inferior services, or substandard food," says Schirber. "So they are being hurt by a system they do not have the power to change."

Focusing on the larger picture

It is worth noting that there are accelerating factors involved in the prevalence of fraud and corruption in the contemporary world. These include changing social norms, the democratization of finance, and the unintended consequences of two decades, worth of market deregulation. It also seems clear that our collective ability to fight fraud, on a company-by-company basis, has been hampered by a lack of appreciation for what can happen when vigilance is inconsistent and urgency is lacking.

As a society, we have tended to focus more on anti-fraud tactics than on anti-fraud strategies. In this book, we will argue that the companies that are successful in avoiding the consequences of fraud employ strategies that allow them to be resilient. Such companies focus on developing practical strategies, workable frameworks and robust processes for preventing fraud, detecting fraud when it occurs, and responding appropriately to minimize the impact of fraud after it has occurred.

During one of our many conversations while writing this book, we realized that the fight against fraud and corruption is in many ways similar to the quest for good health. Our dieting, exercising, and annual physicals won't prevent us from dying one day-but they will help us to live longer, healthier, and more fulfilling lives.

Just because a company has a great risk management program in place does not guarantee that it will never experience an incident of fraud or corruption-but it does mean that when it occurs, the company is likely to recover more quickly and suffer less damage than a company that has been getting by with minimum efforts.

We suggested that fraud and corruption share some similarities with disease. Some diseases we learn to cure; some we learn to treat. We have not yet discovered a "cure" for fraud and corruption, but we can do a lot to make companies resilient and to mitigate their effects.

Potential for catastrophe

Make no mistake-fraud is a problem that drains hundreds of billions of dollars from the economy each year. In addition to directly reducing corporate profits, fraud can lead to a host of other negative consequences down the road. This includes losses of brand power, reputation, market position, competitive advantage, momentum,...

Details zur Ausgabe

• Verlag: Wiley
• Erscheinungsdatum: 2009
• Sprache: Englisch
• ISBN 10: 0470405171
• ISBN 13: 9780470405178
• Einband: Gebundene Ausgabe
• Auflage: 1
• Anzahl der Seiten: 240
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: Nicht verfügbar