| A number of studies have been completed to | | | | compliance programs varied widely, both by |
| determine the factors impacting changes in the level | | | | geography and role." |
| of workplace fraud. In recent years, surveys and | | | | Some of the conclusions generated from the survey |
| reports consistently communicate that workplace | | | | are: |
| fraud is on the rise. As ethics and compliance | | | | In the past year, fraudulent acts have increased |
| enforcement increases, the risks associated with fraud | | | | globally, while they have decreased in the United |
| can be mitigated. However, it's important to remember | | | | States. Senior level executives are increasingly |
| the commitment to ethics and compliance varies | | | | concerned about personal liability as opposed to the |
| globally. | | | | financial hit taken by the company as a result of fraud. |
| As companies look to reduce costs by expanding | | | | Corporate boards in Latin America (95%), the Middle |
| overseas, it's important to consider the risks | | | | East and Africa (87%), Central and Eastern Europe |
| organizations will face by making the move. | | | | (84%) and Australia (81%) are concerned about |
| Fraudulent Findings | | | | personal liability for company fraud, bribery or |
| The 2009/2010 Annual Global Fraud Report published | | | | corruption. 72% of directors in North America are |
| by Kroll, along with the Economist Intelligence Unit also | | | | concerned about these risks. More than half of the |
| concluded an increase in workplace fraud levels. | | | | North American compliance officers see data security |
| Based on the responses gathered from the study: | | | | as the most significant compliance concern in the next |
| "The economic crisis in isolation has raised some fraud | | | | 18 months, followed by concerns over unethical |
| risks. 30% of survey respondents say that the global | | | | business conduct and health and safety. 1 out of 7 |
| financial crisis has increased the levels of fraud at their | | | | respondents has never formally conducted a fraud risk |
| organizations, compared with just 5% who saw a | | | | assessment. |
| decline. Lower profits heighten some risks. 1 in 6 | | | | Moving Forward |
| companies are seeing greater vulnerability from | | | | Understanding cultural differences and evaluating the |
| reducing internal controls to save money, 1 in 7 from | | | | level of risk in each country are considerations that |
| pay restraint, and one in eight from reduced revenues | | | | must be made if a company wishes to reduce the risk |
| overall." | | | | of fraud. Overcoming the risks associated with |
| Ernst and Young released their 11th Global Fraud | | | | expanding business operations overseas will continue |
| Survey on May 19th. Many of the conclusions drawn | | | | to take time. In North America, there have been |
| from this report are similar to the findings in other | | | | significant resources devoted to fighting workplace |
| studies published since the start of 2010. | | | | fraud. Companies are responsible for complying with a |
| Ernst and Young's Global Fraud Survey | | | | number of laws and regulations involving workplace |
| Ernst and Young sought out Chief Financial | | | | fraud that have yet to be adopted on a global scale. |
| Officers (CFO), as well as heads of legal, compliance | | | | There have been cases of fraud in the US where |
| and internal auditing departments to report on | | | | control person liability has been used, holding |
| managing fraud, bribery and corruption risks. The | | | | supervisors or managers responsible for unethical |
| respondents come from 36 countries, providing | | | | employee actions. This remains inline with the growing |
| excellent insight into the risks and occurrences of fraud | | | | personal concerns faced by CFOs, compliance |
| around the globe. In the press release for the study, | | | | professionals and auditors, as it's possible for them to |
| Ernst and Young report: | | | | be held accountable for fraudulent acts they were not |
| "Despite the significant time and money already spent | | | | aware of. Control person liability requires stricter |
| by many companies, our respondents' confidence in | | | | controls and oversight within the workplace in order to |
| the effectiveness and level of adherence to internal | | | | ensure company policies and laws are abided by. |