The majority of organizations are under-resourced when it comes to white-collar crime investigation, fraud detection and reporting. Many organizations conducting financial crime investigations are spending more time “putting out fires” than focusing on fraud detection and applying a proactive investigative approach. Additionally, companies aren’t inclined to freely spend unbudgeted monies to manage risks they don’t consider legitimate. An organization’s ability to effectively manage and mitigate fraud and corruption risk begins with the abandonment of the “no fraud here” mindset and an acknowledgement that fraud and corruption can happen.
When it comes to corporate fraud, the U.S. Department of Justice’s (DOJ) top priority is not financial recovery, but rather bringing the individuals responsible to justice. In a memorandum to federal prosecutors (Yates Memo), Deputy Attorney General Sally Quillian Yates called for a more aggressive stance on holding individuals accountable for their crimes and holding corporate officers and directors accountable for the environment in which those crimes occurred. Prosecutors are holding corporate executives individually accountable not only for acts of fraud or bribery they may have committed, but also for acts they didn’t take clear action to prevent. Such pressures are raising the bar for fraud risk management and anti-corruption compliance.
Given the dynamic nature of white-collar crime and fraud, it isn’t surprising that the Yates Memo is only the latest in a series of catalysts that prompted Protiviti and the Economic Crime and Justice Studies Department at Utica College to conduct a comprehensive survey of white-collar crime and the fraud risk management frameworks used to combat them. While there were a number of notable findings that emerged from our research, one thing seems quite clear: The majority of organizations are not well positioned to conduct investigations. In this report, we detail notable findings that emerged from our survey.