Fraud, theft, and embezzlement have always been a fact of life, but computing, and in particular e-business, has created many new ways to commit fraud. At the same time, online ways of doing business have created new ethical dilemmas. KnowledgeLeader provides policies, tools, articles, and other resources to help you:
- Develop ethics and fraud checklists, policies, and procedures;
- Understand current fraudulent activities;
- Discover best practices to combat fraud;
- Improve ethical standards in all business areas.
Ethics and fraud thought leaders share their techniques and approaches through articles providing ideas, best practices, and actionable advice. Many of these offer suggestions and advice from industry leaders regarding ethics and fraud. Select one of the areas below to view a sample of ethics and fraud information available on KnowledgeLeader.
Business Ethics Questionnaire
This questionnaire is designed to help risk management professionals to determine how well their companies are addressing risks in this area and bringing awareness to ethics programs. The questionnaire is applicable to all organizations looking to glean creative insights into best practices related to business ethics.
Common Fraud Scenarios
This document provides illustrations of different types of frauds and how such frauds could be perpetrated -- including fraudulent financial reporting, misappropriation of assets, improper expenditures, and tax fraud. The purpose is to assist those responsible for conducting a fraud risk assessment in accordance with the requirements of Section 404 of Sarbanes-Oxley Act.
Corporate Responsibility Program Effectiveness Assessment Audit Work Program
The objectives of this audit work program are to assess the effectiveness of a Corporate Responsibility Program (CRP), and to ensure that the company is continuing to put into practice the seven elements of an effective compliance program.
Entity-Level Controls – Fraud Questionnaire
Fraud prevention is essential to set the right tone for an effective internal control framework. This excel-based template links the COSO components to a number of control objectives for entity-level fraud controls. Within the questionnaire you can document items such as whether the control exists; whether it was designed properly; related test procedures; and the management action plan for deficiencies.
Ethical Business Conduct Guidelines Audit Work Program
The purpose of this work program is to provide the general steps used to perform an audit of ethical business conduct guidelines. This document provides guidance on obtaining a list of all executives and directors, determining who is required to sign an ethical business conduct form, obtain access to employees’ human resource files, and other steps needed to complete this audit.
Fraud Policy
This policy describes a broad range of actions that constitute fraud and that must be reported. The conditions of this policy apply to any irregularity, or suspected irregularity, involving not only employees but also shareholders, vendors and outside agencies. This policy addresses investigation responsibility, confidentiality, and reporting procedure.
Fraud Prevention Process – Debit and Credit Card Transactions Audit Work Program
The objective of this audit work program is to identify and evaluate the effectiveness of a debit and credit card service provider’s fraud prevention process. This work program reviews the reports utilized to monitor fraudulent activities involving debit and credit cards and system settings intended to identify potentially fraudulent transactions.
Internal Audit Department Charter – Sample
This sample Internal Audit Department Charter is a guide to the information generally contained in such a charter, and how it can be formatted. The charter reviews the mission, organization, responsibilities, reporting guidelines, and code of ethics for an internal audit department.
Quarterly Compliance Assessment – Audit Report
This sample includes an internal audit quarterly assessment of a financial services company’s compliance policies and procedures. In this report, internal audit validates the operational effectiveness of key activities and controls within these policies and procedures. This assessment focuses on policies and procedures relating to anti-money laundering, whistleblower hotlines, custody, insurance, and code of ethics.
Social Responsibilities Programs Analysis Audit Work Program
Reputation risk associated with lack of social responsibility programs, instances of possible ethics violations, and other ‘red-flag’ occurrences should be considered during annual audit planning. This work program is intended to position the internal audit function to help identify social responsibility issues that the organization may not be adequately addressing and to assess controls around those programs.
Whistleblower Policy and Procedures
This policy establishes the standards and procedures to ensure that accounting and audit related complaints handling complies with management’s and the audit committee’s objectives.
The 2007 Oversight Systems Report on Corporate Fraud
Although the Sarbanes-Oxley (SOX) Act took effect five years ago, Oversight Systems’ national survey of certified fraud examiners finds that three-quarters of respondents feel institutional fraud is more prevalent today than it was in 2002. Survey participants included anti-fraud professionals such as internal auditors, independent auditors, law enforcement officials, investigators and management consultants.
Academia responds to the need for fraud and forensics training
Once the domain of on-the-job and corporate training programs, colleges and universities are now offering fraud and forensic training classes with greater frequency. Some schools have integrated fraud training across their accounting curricula; others have dedicated courses in fraud examination. This article describes the different approaches universities are taking in teaching fraud-related courses, the different certificate and degree programs available, and the specialized skills needed to detect fraud in the business world.
Assessing Risk in Travel & Entertainment or Procurement Card Programs
The steady drip-drip-drip of small to medium purchases on a corporate credit card can quickly fill a large bucket of unnecessary – and even fraudulent – expenses. This article discusses how assessing corporate card program risk is an important piece of a company’s risk management strategy. It also provides suggested steps to complete this risk assessment process.
Building a corporate ethics program
Corporate ethics programs have become a priority for many company executives in response to new regulatory requirements. In this article, Chris Yost, Whole Foods director of internal audit, Donna Passal, Office Depot director of corporate governance, and Scott Mitchell, OCEG president, offer their perspectives on building and maintaining a successful corporate ethics program. They describe their automated compliance tools, following up on findings, communication strategies, and other key aspects of ethics programs.
The Computer Fraud and Abuse Act of 1986 (The CFAA)
The CFAA was originally intended to clarify definitions of criminal fraud and abuse for federal computer crimes, and to remove the legal ambiguities and obstacles associated with prosecuting these crimes. Originally quite limited in scope, in its present form it imposes both civil and criminal liability for a wide variety of acts that compromise the security of public and private sector computer systems.
Counseling on the Fringe of Indictment
The President’s Corporate Fraud Task Force remains focused on cleaning up corruption in the board room, restoring investor confidence to the marketplace and sending a clear message that corporate wrongdoing will not be tolerated. The Department of Justice has issued statements regarding the federal prosecution of business organizations, detailing a set of principles to guide its prosecutors as they consider whether to seek charges against a company. These guidelines also offer corporate counsel insight into navigating turbulent indictment waters.
Due Diligence: Protecting Against Fraud and Third-Party Negligence
While business executives struggle to keep their companies healthy, they find that every important decision they make is subject to heightened scrutiny. How can officers, directors and executives make crucial decisions for their corporations without incurring the wrath of shareholders, clients and prosecutors who second-guess their efforts long after the fact? One well-tested method is to base executive decision-making on the outcome of careful due diligence.
Foreign Corrupt Practices Act: Dormant No More
Most businesses do not engage in international operations or sales with the intent of committing bribery. Instead, inadequate training and monitoring of international sales forces, consultants, subcontractors or partners creates an environment where borderline activities or outright corruption can occur regularly, yet remain hidden. This issue of Litigation and Fraud News discusses red flags, vulnerable industries and activities, and the components of an effective compliance program.
Government Investigations Uncover Abuses in Insurance Industry
The feature article in this issue of the newsletter is Government Investigations Uncover Abuses in Insurance Industry. The article explains that New York Attorney General Eliot Spitzer has expanded his investigative targets from the mutual fund industry to include the insurance industry – a sector that amounts to 10 percent of the national economy. Allegations against some of the world’s largest insurance brokerage firms range from conflicts of interest involving bid-rigging and subsidiary investments, to disclosure regarding inflated earnings and hidden commissions.
Incident response and fraud investigation - the role of the information technology auditor
All IT-related frauds start as an IT incident, which is an event that disrupts day-to-day IT processing. Incident response is the first step: determine what happened, decide what to do about it and determine whether the incident is fraud related. This article discusses incident response issues, and then provides guidance on the role of information technology auditors in fraud response, investigation, analysis, and prevention.
Internal audit’s role in fraud prevention
In the rush to prepare for Sarbanes-Oxley compliance, organizations sometimes lose site of the purpose of the legislation -- to prevent massive financial frauds. This article provides specific recommendations for internal auditors about deterring and detecting fraud, and includes a discussion of the key elements of SAS-99 - the fraud-related procedures required for financial statement audits.
Investigations and the Foreign Corrupt Practices Act
Compliance with the Foreign Corrupt Practices Act (FCPA) is once again in the regulatory spotlight. As growing numbers of U.S. companies pursue opportunities in the global marketplace, many have encountered ethical situations that have given rise to government investigations of potential violation of the FCPA. This article outlines FCPA's requirements and discusses red flags, risk assessment techniques, and multi-method approaches to the delivery of employee education and awareness programs.
Learning from Fraudsters
Numerous surveys in recent years have focused on fraud committee by senior management. Whilst these surveys have highlighted the extent and depth of the problem globally they have only looked at the issue from the perspective of the company or employer. The objective of this research report was to take a totally different approach and to obtain an understanding of corporate fraud from the people who are responsible for these criminal acts and to try and understand why and how they became fraudsters. The research was conducted directly with prisoners who share their situation, motivation, and story. (Note: The report contains language some people may find objectionable.)
New stature for ethics officers
Recent high profile legislation and commission recommendations have focused on the importance of business ethics - thus raising the profile of corporate ethics officers and bringing their responsibilities to the fore. This article includes interviews with corporate ethics officers and with the Ethics Officer Association. It reveals the responsibilities these officers have within their organizations and their impact on corporate governance.
Scrutinizing Hedge Funds in the New Regulation Era
With the Securities and Exchange Commission’s (SEC) new regulations for hedge fund compliance now in effect, these funds remain as controversial as ever. Recent scandals, allegations of fraud and lackluster returns have challenged the investment industry and resulted in the SEC seeing the need for greater regulation. This issue of the Litigation and Fraud News addresses the controversy surrounding the regulation of hedge funds.
Stepping up to the Plate on Fraud Risk Assessment
Fraud risk is company wide and needs to be on every employee’s radar, top to bottom. A fraud risk assessment can help any organization improve its education around fraud risk. In this two-part series, Gene Agee from Sprint, and Tom Andreesen from Protiviti, provide insight into Sprint’s fraud risk assessment process, the importance of executive sponsorship, and the power that open dialogue brings to the end result.
Ten Ways to Tune Up Your Fraud Risk Management Approach
Given the current economic climate, it is not surprising that the potential for fraud has increased. Of the 507 Certified Fraud Examiners who responded to a 2009 survey, more than half indicated that the number of frauds has increased during the past year. Despite these findings, not all organizations are stepping up their fraud assessments and risk management efforts. This article provides 10 specific action internal auditors can take.
KnowledgeLeader features descriptions of, and links to, many of the most useful business ethics and fraud related sites on the web, including:
Association of Certified Fraud Examiners
The Association of Certified Fraud Examiners is a professional organization representing individuals trained in the highly specialized aspects of detecting, investigating, and deterring fraud and white-collar crime. This site features membership information, certification requirements, abstracts of white papers, and a publications catalog.
Business for Social Responsibility
The BSR Resources section offers a collection of research, investigative tools and practical guidelines on responsible business practices. White paper topics include business ethics, the environment, and human rights.
Center for Public Integrity
The mission of the Center is to provide the American people with the findings of investigations and analyses of public service, government accountability and ethics related issues.
Ethicsweb
This website provides an avenue to several articles and guides on ethics for various industries.
FBI's National Computer Crime Squad
The FBI's National Computer Crime Squad (NCCS) investigates violations of the Federal Computer Fraud and Abuse Act of 1986. These crimes cross multiple state or international boundaries. Violations of the Computer Fraud and Abuse Act include intrusions into government, financial, most medical, and Federal interest computers. Federal interest computers are defined by law as two or more computers involved in a criminal offense, which are located in different states. Therefore, a commercial computer which is the victim of an intrusion coming from another state is a "Federal interest" computer.
FraudInfo.com
FraudInfo.com is the leading consumer, business, and professional resource on the Internet for detecting, reporting, and preventing fraud and white-collar crime.
The Institute for Business and Professional Ethics
The Institute for Business & Professional Ethics is a joint effort of the Colleges of Liberal Arts and Sciences and Commerce at DePaul University.
International Business Ethics Institute
The Institute promotes corporate responsibility through two key program areas. First, it works to increase public awareness and dialogue about international business ethics issues through such educational resources and activities as the Roundtable Discussion Series, the International Business Ethics Review (a quarterly publication), and the Institutes multilingual Web site. Second, the Institute works closely with companies to assist them in establishing effective international ethics programs. The Institute is dedicated to disseminating business-ethics information to demonstrate the positive, tangible changes that responsible business can generate.
Internet Crime Complaint Center (IC3)
The Internet Crime Complaint Center (IC3) is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C). IC3's mission is to serve as a vehicle to receive, develop, and refer criminal complaints regarding the rapidly expanding arena of cyber crime. The IC3 gives the victims of cyber crime a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. For law enforcement and regulatory agencies at the federal, state, local and international level, IC3 provides a central referral mechanism for complaints involving Internet related crimes.
National Fraud Information Center (NFIC)
The NFIC was originally established in 1992 by the National Consumers League, the oldest nonprofit consumer organization in the United States, to fight the growing menace of telemarketing fraud by improving prevention and enforcement.
Open Compliance & Ethics Group (OCEG)
The Open Compliance & Ethics Group (OCEG) is a coalition of the nation's business leaders assembled to develop compliance standards and guidelines. These standards are designed to optimize the proactive education of organizational directors, officers, and employees to reduce risk, fraud, and malfeasance, and to restore the public's confidence and faith in the corporate world. Importantly, OCEG outlines standards and guidelines that reflect both the "spirit" and the "letter" of the laws, rules, and regulations.
Transparency International
Transparency International (TI) is a leading international non-governmental organization devoted to combating corruption. Through its International Secretariat in Berlin and its more than 85 independent National Chapters around the world, TI works at both the international and national level to curb the supply and demand of corrupt practices.
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