Proactively protect your business against fraud
In business, fraud and misconduct are always a regrettable possibility. But during times of great uncertainty, the risk is amplified—and the stakes are higher than ever.
The Association of Certified Fraud examiners calls times like todays “a perfect storm for fraud.” Scams are on the rise during the COVID-19 crisis. Its ripple effects—from economic recession to dramatic social and political consequences—will add to the risk.
Integrity in adversity
History shows that when organizations and their people face extraordinary challenges, fraudsters strike. As today’s companies are navigating profound social, economic and geopolitical disruptions, it’s repeating itself.
Integrity in adversity: Raising the standard of corporate behavior during times of uncertainty examines how companies can use these difficult times to raise the bar for corporate conduct for the long-term. It outlines a comprehensive approach to corporate integrity that helps businesses weather the storm and get fit for the new reality.
Corporate integrity is more important than ever.
As companies fight for survival and employees face great personal hardship, the temptation, pressure and opportunity to stray into gray areas increases. With fewer resources to monitor standards of behavior, companies are liable to let their guard down. Meanwhile, economic distress can motivate employees to breach the rules in ways they wouldn’t in ordinary times.
Malfeasance takes many forms.
In order to tackle the problem of misconduct, organizations must assess the risks by analyzing the types of misconduct they experience. These cover a wide array of illicit behavior, both fraudulent and otherwise, that could damage reputations, cause financial harm, disrupt operations, and create disarray among employees, customers, suppliers, and business partners. This could also include behavior that contravenes government regulation, such as anti-money- laundering rules, and leads to larger fines or being disbarred from doing business.
Dealing with misconduct requires a comprehensive corporate integrity program.
Only a well-constructed, thoughtfully implemented and consistently enforced compliance and integrity program that covers all forms of corporate misbehavior, inside and out, is likely to protect an organization’s reputation. An effective approach covers three key phases: prevention (controls), detection (monitoring) and response (investigation).
Good behavior is a continuous process.
When it’s back to business as usual, companies must ensure the integrity program does not finish, but adapts to the changing environment. It takes teamwork and tenacity to develop an organizational culture with high integrity that sustains over time. This entails recognition that high standards of conduct are everyone’s responsibility, setting the right tone at the top, and providing the right tools and process to protect the business from harm.
KPMG Forensic team works with compliance and risk leaders to help bolster fraud controls to reduce losses, improve compliance, and build more ethical and resilient organizational cultures. Learn about combatting fraud in the new business environment with our library of content.