Be prepared. Face the fraud. Emerge stronger.
PwC’s Global Economic Crime and Fraud Survey 2018, gathering valuable data from more than 7,200 respondents across 123 different territories, aims to pull fraud out from the shadows – and shed much-needed light on some of the most important strategic challenges confronting every organisation.
The survey shows that many companies are underprepared to face fraud, for both internal and external reasons. This is why shining a light on an organisation’s fraud blind spots, and sharing a clear understanding of what constitutes fraud – and what needs to be done to prevent it – is so important.
Doing so can also unlock significant opportunities. It can help make positive structural improvements across the organisation – which can make the business stronger and more strategic in both good times and bad. That includes removing siloes in functions like compliance, ethics, risk management and legal – and enabling a culture that is more positive, cohesive and resilient.
It’s true that the value proposition of an up-to-date fraud programme can be hard to quantify, making it sometimes difficult to secure the investments needed. But the opportunity cost – financial, legal, regulatory and reputational – of failing to establish a culture of compliance and transparency can be far greater.
Not only has the threat of economic crime intensified in recent years, the rules and expectations of all stakeholders – from regulators and the public to social media and employees – have also changed, irrevocably. Today, transparency and adherence to the rule of law are more critical than they have ever been.
And that’s a good thing, because in the court of public opinion, where reputations can be won and lost overnight, a business will be held accountable tomorrow for what happens today. Therefore, how it responds when a fraudulent event or compliance issue arises will be as important for the company as the event itself.
Understanding this principle gives a business the opportunity to get ahead of fast-moving events, and to demonstrate to both internal and external stakeholders that it is on top of the issues. Not only are there considerable reputational benefits to ‘owning’ transparency, in an atmosphere of zero tolerance, doing so can actually enhance the job security of senior management – while attracting the next generation of leaders to the organisation.
An unplanned event can quickly spiral into a crisis if not well managed. But with the right mechanisms in place – a culture of cohesion and openness and a sophisticated control environment – a company will be well positioned to absorb the shocks, build ‘muscle memory’, and emerge stronger. The imperatives are clear: place transparency at the heart of corporate purpose, use it to unite strategy, governance, risk management and compliance, and find yourself better positioned to transform a potentially serious business problem into an opportunity to come out ahead.
Find out more about effectively preventing fraud in your organisation at our Workshop on 'Planning and Conducting Fraud Investigation'. The session will be delivered by Iyad Mourtada, the General Manager of OpenThinking, a leading business training company in Dubai and an authorized trainer with the ACFE to teach the CFE Exam Review Course in the UAE. He is the author of several internal audit and anti-fraud books and frequent speaker in many international conferences for IIA, IMA and ACFE.