A vast majority of research reports over the previous years have indicated that the number of disclosed corporate fraud incidents and cases of misconduct is on the rise. Taking into account the overall increase in the level of scrutiny placed by regulators, governments and even the general public on issues of business integrity, this should come as no surprise. Now more than ever, properly dealing with integrity issues should be high on the agenda to safeguard market confidence and public trust. Only then can an organization be rewarded of the benefits that arise from an ethical business behavior reputation.
At the same time, however, we see that companies are still not doing enough to proactively mitigate the risk of fraud and misconduct. More than that, many business owners and executives are sometimes unaware of the extent to which their company is at risk. They also are unaware of the various ways in which their business can become a victim and what the potential impact of fraud on an organization can be (both financial and non-financial).
Yet, this might not completely be their fault: most organizations that are confronted with an instance of corporate fraud or misconduct have a vested interest in keeping these instances from becoming public knowledge. The number of reported incidents is therefore only a small fraction of the actual cases and, as a result, the risks related to internal fraud are sometimes drastically underestimated – both in terms of likelihood and potential impact.
The questions business owners and executives should ask themselves are therefore not if, but how fraud could arise within their organization, and which preventive measures can be taken to manage the risk more effectively. These are, of course, not easy questions to answer; after all, corporate fraud can occur in many different shapes and sizes and is therefore often very difficult to apprehend. A necessary first step in making sense of the complexities involved, is applying a structured approach in understanding your organization’s current efforts in terms of fraud risk management and identifying the main areas for improvement.
As KPMG Forensic, we can help you make this first step and guide you in applying a structured approach to assessing your organization’s maturity in terms of fraud risk management program. We do this by deploying a pragmatic framework that is aimed at evaluating any organization’s fraud risk management efforts on three different levels:
Applying this framework allows your organization to obtain a quick, structured and comprehensive overview of its current maturity in terms of Fraud Risk Management, and – more importantly – enables you to highlight those areas that represent the biggest improvement opportunities. With this information in mind, any further actions with regards to your organization’s Fraud Risk Management can be defined in a more informed and structured way. As a result, your organization will be one step closer in the journey to becoming a well-prepared organization and inspire market confidence and public trust.
Want to learn more about how your organization can tackle the ever-present risk of corporate fraud on a day-to-day basis? Do not hesitate to contact us.