Combating Fraud in a Global Economy

As the global economy continues to grow, and more and more companies become involved in international business the role of the fozia shan siddiqi remax examiner becomes all the more important. With companies doing more business in more countries, the added layers of bank accounts and different currencies, there become more and more opportunities to commit fraud at every level of the company.

Fraud examination, as an industry, continues to grow more and more important both at home and abroad in the business environment. With all of the fraud cases in the last decade alone it has become very clear that this is a duty for the independent and diligent hoping to seek out truth. These cases of fraud are not only an inconvenience and crime against the companies that they are perpetrated against but have effects on all stakeholders. It then becomes the duty of the fraud examiner to seek the justice for all.

The main question for all of these fraud examiners is what is the best way to combat against fraud in a global economic climate. Firstly we must combat corruption as a global priority. Next we must stop justifying unethical behavior and misconduct, companies must bolster their defenses against fraud, and appropriated steps must be taken to minimize risk.

The first issue to be discussed is possibly the largest elephant in the room. That is the constant overlooking of bribery and corruption in still developing global economies. While companies throughout the United States know that bribing local officials to expedite business ventures and opportunities is wrong it is not frowned upon as much globally. In some countries it is even an expectation. This is especially true in more emerging economic countries. These just developing countries are still trying to find their place in a global economy and are having difficulty navigating the rights and wrongs of a business culture. It is a very important step in the global economy that all countries, developed and still under development, are on the same page when it comes to corruption and bribery. That will destroy a key element of fraud.

A second, and equally as important a step in fighting fraud, is that CEO’s and high level executives must stop justifying unethical behavior and misconduct. One of the main deterrents that has been used in recent years is holding these managers accountable through enforcement. Board members need to recognize that they may be held accountable in the event that fraud or impropriety happens under their watch. They must therefore be alert to the potential risks their companies face and how they can demonstrate that they have responded appropriately. Such actions take particular importance as companies enter emerging markets such as Africa, Brazil, China, India and Eastern Europe, where they may be exposed to heightened risks. Companies need to continually update their risk management policies and procedures so that they are able to identify new risks and respond to new challenges.

Such efforts appear to have paid off – last year the SFO received more tips from whistleblowers than from self-reports. Despite this progress, there remain obstacles to the use of internal reporting channels. Beyond fear for personal safety, respondents highlighted their loyalty to the company as one of the main deterrents to reporting an incident of fraud, bribery or corruption.

This brings us to the third element, companies must bolster their defenses against fraud. With regulators using increasingly sophisticated tools to analyze data and identify trends to highlight potential fraud. It has become ever more important that companies catch up in house. There are six steps that companies can follow to ensure that their internal controls are able to keep up with the sophistication of fraudsters.

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