Public Company Management
Public company management is on the front lines of the fight against fraud, playing perhaps the largest role in the deterrence and detection of fraud. The Anti-Fraud Collaboration takes a cross-functional view of management’s role with a keen interest in sharing resources that detail how they shape culture and design controls that mitigate risks to an acceptable level.
We understand that it is critical to examine all of the ways that management can help fight fraud. Our resources on skepticism can aid and assist company management as they fulfill their responsibility to maintain accurate books and records. Our examination of skepticism includes a look at how company management can use a skeptical mindset in the implementation of an effective system of internal control.
Of course, company management is also responsible for evaluating and managing the company’s business risks, including the risk of financial reporting fraud, and then implementing and monitoring compliance with appropriate internal controls to mitigate those risks to an acceptable level. In a review of insights from SEC enforcement actions, we have outlined steps company management can take to mitigate fraud risk.
In the case of financial reporting fraud, critical controls start with the ethical tone at the organization’s top. They include a strong code of ethics, fraud awareness training, hotline reporting mechanisms, monitoring tools, and processes to investigate, evaluate, and, where necessary, punish wrongdoing. Our extensive exploration of corporate culture includes many specific recommendations for company management to aid in the establishment and preservation of an ethical culture.
While management plays the foremost role in preventing and detecting fraud, some of our reports have shown they typically are involved when material financial reporting fraud does occur. We identified that in these situations, management is usually found ignoring the company’s code of conduct and overriding internal controls. Consequently, the roles of other parties in the financial reporting supply chain are critical in adequately addressing the risk of financial reporting fraud.
Setting the Tone at the Top
Management should take primary day-to-day responsibility for an organization’s culture. They must not only set the tone at the top but also actively track and guide their organization’s culture. Our resources will help management find tools and techniques to assess culture, identify problems, and make critical changes that will aid in fraud deterrence.
Management’s Role in Risk Mitigation
Fraud frequently involves circumvention of controls because management failed to set these standards in the first place. Our resources help outline additional fraud schemes, what can pose a significant risk, and how management can help mitigate these risks.
Why Management Should Embrace Skepticism
Skepticism is another vital ingredient to the establishment of an ethical culture. Management should encourage employees to feel not only comfortable but also obliged to question and challenge the results for which they are responsible. Explore skepticism resources which outline proactive steps public company management can put in place to enhance skepticism.
Leveraging Emerging Technology for a 360-degree View
Innovation and technology are crucial in the fight against fraud. The Anti-Fraud Collaboration examines emerging technologies and how these tools can be used to help deter and detect fraud or present new risks to consider.
Culture
Setting the Tone at the Top
Management should take primary day-to-day responsibility for an organization’s culture. They must not only set the tone at the top but also actively track and guide their organization’s culture. Our resources will help management find tools and techniques to assess culture, identify problems, and make critical changes that will aid in fraud deterrence.
Risk
Management’s Role in Risk Mitigation
Fraud frequently involves circumvention of controls because management failed to set these standards in the first place. Our resources help outline additional fraud schemes, what can pose a significant risk, and how management can help mitigate these risks.
Skepticism
Why Management Should Embrace Skepticism
Skepticism is another vital ingredient to the establishment of an ethical culture. Management should encourage employees to feel not only comfortable but also obliged to question and challenge the results for which they are responsible. Explore skepticism resources which outline proactive steps public company management can put in place to enhance skepticism.
Technology
Leveraging Emerging Technology for a 360-degree View
Innovation and technology are crucial in the fight against fraud. The Anti-Fraud Collaboration examines emerging technologies and how these tools can be used to help deter and detect fraud or present new risks to consider.