At Trifin Financial Services we realise that fraud is at an all time high. We have relevant experience in small and large businesses and are able to help you ensure that your financial environment is secure. Please feel free to contact us for an explorative discussion as to how we can add value to your business through our risk review and control assessment process; and help ensure that your wealth is not being stolen. The following article indicates some of the many factors to be considered when it comes to fraud – the concept of an audit committee is introduced – this is but one of many ways we can help you protect your assets:
As the eyes and ears of the board and shareholders, the audit committee plays a pivotal role in helping to stop or reverse the rise in reported fraud incidents worldwide.
Thirty-seven per cent of more than 5,000 respondents in PwC’s most recent global economic crime survey reported being hit by one of five most frequent frauds: asset misappropriation, procurement fraud, bribery and corruption, cyber-crime, and accounting fraud. That was up 7 percentage points from the 30% of respondents who reported being affected in the 2009 survey.
“It’s everybody’s job in the company to deter fraud,” said Chris Rogers, CPA, CGMA, the CFO at Infragistics, a New Jersey software developer with operations on five continents.
Amongst employees, CFOs and controllers often shoulder much of the responsibility to prevent fraud. On the board level, the independent business experts from outside the company who sit on the audit committee take on a special role as fraud busters, said Rogers, who has served on audit committees at different companies for more than a decade.
Regulation has bolstered the role of the audit committee in past years, he said.
Audit committee members interface with the independent auditor to ensure that the company’s financial results are accurately portrayed, he said. They also make sure sound internal controls are in place and working to prevent fraud, and those controls should uncover fraud quickly and effectively when it occurs.
Given unfettered access, audit committee members can be invaluable conduits of information between the board and the CFO. “In my world, the audit committee is my ally on the board,” Rogers said.
Committee members should not underestimate their influence on the company’s top management to act ethically, according to a PwC report on how audit committees can maximise their performance.
Rogers recommended installing an employee whistle-blower hotline that goes directly to audit committee members.
To do their pivotal role justice, PwC suggested audit committee members also embrace fraud deterrence by:
- Ensuring management performs robust annual reviews of the company’s compliance programmes and reporting systems.
- Requesting periodic updates on the external enforcement environment and the company’s fraud training and prevention programmes.
- Being familiar with the sentencing guideline requirements for effective compliance programmes.
- Understanding the nature and volume of allegations reported to the company’s whistle-blower hotline.
- Requesting periodic updates from management about reported allegations.
- Understanding the company’s response to whistle blower laws and whether additional measures should be taken.
Give us a call to discuss this further.
Wayne Jaggard firstname.lastname@example.org 082 800 2508