RSM Australia

Fraud, bribery and corruption (and improper conduct) control

Fraud, bribery and corruption risk is right at the top of the agenda of issues that can harm an organisation. This financial and/or reputation harm covers all companies and government entities, regardless of industry or specialisation. Fraud or improper conduct can occur in almost all business processes such as procurement, payroll, accounts receivable, accounts payable, asset management, IT and the protection of confidential information and data.

With a total worldwide fraud loss of nearly $3.7 trillion (source: Association of Certified Fraud Examiners (ACFE)), increasing shareholder and stakeholder interest, evidence that the presence of anti-fraud controls is associated with reduced fraud losses, and the continual focus on prudent government expenditure of public money, the time has never been better to ‘get to know what you may not know’. Nationally, fraud within Australia is recognised as 40% of the cost of all crime (source: Australian Institute of Criminology (AIC)). Organisations can lose up to 5% of their annual revenue due to fraud, varying between industries (source: ACFE).

The following are key areas of focus for mitigating fraud, bribery and corruption.

Planning, resourcing, implementation and management

  • Executive leadership and operational management of the fraud, bribery and corruption control framework
  • Devising, reviewing or benchmarking existing fraud, bribery, and corruption control arrangements against standards (such as the Australian Standard AS 8001 Fraud and Corruption Control) and other leading practice. To maximise business efficiency and effectiveness, this needs to be integrated with your governance, risk and internal control environment.

Prevention

  • Integrity framework (including codes of conduct or ethics, ethics committees)
  • Awareness training to employees, executives and management, those with fraud control responsibilities
  • Fraud, bribery and corruption risk assessments (AS/NZS ISO 31000 Risk Management or COSOcompliant as required) and reviews, employee surveys
  • Forensic background checking, including employment screening
  • Controls testing, fraud profiling

Detection

  • Fraud, bribery and corruption diagnostics, ‘deep dives’
  • Forensic IT
  • Whistleblower hotline or help line advice
  • Other techniques such as surprise forensic audits/special reviews, forensic background checking, fraud red flag reviews

Response

  • Fraud crisis management
  • Investigation response (multi-disciplinary forensic investigations, procedures, planning, teaming)
  • Liaison with, and supporting any reporting to, law enforcement agencies as necessary

Should auditors be responsible for detecting fraud?

11 June 2018
An auditor is a watchdog, not a bloodhound...

Fraud & Forensics - the 'must knows' for business leaders

23 May 2018
This month, Roger Darvall-Stevens, Partner and National Head of Fraud & Forensic Services at RSM, is featured in Financier Worldwide’s Corporate Fraud & Corruption Annual Review. In the feature, he talks about regulatory developments in Australia, fraud & corruption risks and offers advice to businesses on how to mitigate t

Unleash the power of whistleblowers in war on fraud

8 May 2017
Rather than putting a black mark against them, Australian firms should recognise the power of whistleblowers as an early warning system in the fight against fraud and corruption.

ASIC keeps eagle eye on professional advisers

23 August 2016
The Australian Securities and Investment Commission (ASIC) has demonstrated a continued commitment to investigating and prosecuting professional advisers who aid in breaches of director duties, or who are involved in phoenix activity.

Ultranet Operation Dunham

31 March 2016
RSM’s Fraud and Forensic Services’ Roger Darvall-Stevens and Probity Adviser Michael Shatter share their thoughts on the public examinations of Operation Dunham, Victoria’s Independent Broad-based Anti-Corruption Commission’s (IBAC) investigation into the Department of Education and Training’s $180 million Ultranet project.

C-Suite's dirty little fraud secret

25 August 2015
Fraud by CEOs, CFOs and others in the ‘C-suite’ is a dirty little secret which is rarely discussed but happens with disturbing regularity. It is one of those once in a lifetime events that seem to happen regularly!

Government entities: corruption risk management and an integrity framework

15 July 2015
Government (at the Commonwealth, state or territory, local levels with municipal councils, and agencies and other government entities) has been leading the way in mitigating the risks of fraud, bribery, corruption and improper conduct which is often in terms of breaches of public sector values or public sector codes of conduct or ethics.