Culture

Fraud TriangleStudies show that organizations that encourage ethical behavior are more resistant to misconduct of all kinds, including financial reporting fraud. A strong ethical culture hedges against all three sides of the fraud triangle – pressure, opportunity, and rationalization. In an ethical culture, pressure to commit fraud is counteracted through sound risk management strategies and appropriate incentives. It will support well-designed controls that reduce opportunities for fraud and increase the likelihood of early detection. A culture of honesty limits an individual’s ability to rationalize fraudulent actions.

Management is primarily responsible for an organization’s culture, and together with the board of directors, sets the “tone at the top” by communicating and visibly adhering to clear ethical principles and codes of conduct and by providing necessary support and resources for robust fraud risk management programs and internal controls.

Another vital ingredient in an ethical culture is skepticism. Management should encourage employees to not only feel comfortable but obliged to question and challenge the results for which they are responsible.

The Anti-Fraud Collaboration produces resources aimed at helping corporations nurture cultures that help deter and detect fraud and equips all stakeholders within the financial reporting supply chain with the tools they need to fight fraud.

Take a look at our corporate culture resources below:

Encourage The Reporting of Misconduct

Encourage The Reporting of Misconduct

Misconduct by any employee can potentially ruin any organization. Management typically institutes a variety of processes to minimize this risk and analyze and address any alleged transgressions. In an effort to better understand the factors that impede the reporting...

LDC Cloud Systems Case Study

LDC Cloud Systems Case Study

The LDC Cloud Systems Case Study is another installment in the Anti-Fraud Collaboration’s successful series of case studies. Participants in case study teachings start with a hypothetical scenario about a fictional company dealing with a fraud. Guided by an...

LDC Cloud Systems Case Study Video Vignettes

LDC Cloud Systems Case Study Video Vignettes

The Anti-Fraud Collaboration has developed six short video vignettes for use with the LDC Cloud Systems Case Study. In each vignette, actors reenact several interactions selected from the case study. The videos, which can also be found on YouTube, do not provide...

Oversight of Corporate Culture: A Core Asset in Driving Performance

Oversight of Corporate Culture: A Core Asset in Driving Performance

Led by an expert panel, this program highlights leading practices on assessing and strengthening a company's corporate culture, including how culture impacts strategy, risk, and performance. Sound corporate culture is a cornerstone of fraud deterrence and detection....

Seven Principles for Understanding and Avoiding Short-Termism

Seven Principles for Understanding and Avoiding Short-Termism

While short-termism is a sizable challenge, so too is the commitment to understanding why this is such an entrenched business practice, and how we can mitigate its harmful effects. The Anti-Fraud Collaboration hosted a webcast, “Coming to Terms with Short-Termism”, to...