Washington, DC – When corporate scandals occur, the root cause can often be traced back to an organization’s weak ethical culture. According to a new white paper from the Anti-Fraud Collaboration, implementing robust and regular assessments of corporate culture can help to deter and detect fraud, enabling leadership to take proactive steps to address problems before they result in scandal.
Entitled Assessing Corporate Culture: A Proactive Approach to Deter Misconduct, the white paper is the latest resource to assist organizations in the deterrence and detection of financial reporting fraud and other misconduct, prepared by the Anti-Fraud Collaboration: the Center for Audit Quality (CAQ), Financial Executives International (FEI), the National Association of Corporate Directors (NACD), and The Institute of Internal Auditors (The IIA). It recommends approaches to help companies conduct regular assessments of the state of their culture, including culture dashboards, orientation processes, employee information gathering, incentives, problem identification, and proactive listening.
“Building on the Anti-Fraud Collaboration’s decade-long efforts to raise awareness of the influence of corporate culture on conduct, this white paper emphasizes the efficacy of regular assessment in deterring and detecting those elements of culture that can serve as a breeding ground for misconduct,” said CAQ Executive Director Julie Bell Lindsay. “With the practical monitoring outlined here, corporate culture can be a valuable asset in reinforcing desired behaviors, mitigating risk, and maintaining marketplace and shareholder confidence.”
In addition to exploring the importance of organizational culture, the white paper defines roles and responsibilities for maintaining and influencing culture, which typically falls to boards of directors and senior management.
“It is well established that companies with strong, ethical cultures can better resist fraud,” added Andrej Suskavcevic, FEI President and CEO. “FEI urges company leaders in the finance function and beyond to consult this publication to guard against financial fraud.”
“The findings in this report expertly synthesize a variety of strategies and materials to aid directors in assessing its own culture,” said Peter Gleason, NACD president and CEO.
The Anti-Fraud Collaboration also emphasizes the risk factors and considerations for both external and internal auditors, who monitor and evaluate culture as part of the audit process.
“Maintaining a healthy corporate culture is a complex task, requiring sustained effort on multiple levels,” said The IIA President and CEO Richard F. Chambers, CIA, QIAL, CGAP, CCSA, CRMA. “By taking a closer look at the process of culture assessment, this new resource from the Anti-Fraud Collaboration will help internal auditors and others address that complexity.”
For more on assessing corporate culture, watch the Anti-Fraud Collaboration’s December 2019 webcast on the topic.
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About the Anti-Fraud Collaboration
The Anti-Fraud Collaboration represents the collaborative efforts of the Center for Audit Quality, Financial Executives International, the National Association of Corporate Directors, and The Institute of Internal Auditors, organizations that actively engage in efforts to mitigate the risks of financial reporting fraud. The Collaboration’s goal is to promote the deterrence and detection of financial reporting fraud through the development of thought leadership, awareness programs, educational opportunities, and other related resources specifically targeted to the roles and responsibilities of participants across the financial reporting supply chain.
Contact
- CAQ: Amy O’Connor, 202-609-8061, aoconnor@www.thecaq.org
- FEI: Lili DeVita, 973-765-1021, ldevita@financialexecutives.org
- NACD: Susan B. Oliver, 703-216-4078, susanboliver@gmail.com
- The IIA: John Babinchak, 407-937-1240, john.babinchak@theiia.org