Assessing corporate culture can help deter fraud

Doing regular corporate culture assessments can help deter and uncover fraud to help executives solve problems before they lead to scandal, according to a new report.

The report comes from Anti-fraud collaboration, a joint effort of the Center for Audit Quality, Financial Executives International, the National Association of Corporate Directors and the Institute of Internal Auditors. The white paper “Assessing Corporate Culture: A Proactive Approach to Deter Misconduct” recommends several approaches to help companies perform periodic assessments of the state of their culture, including cultural dashboards, referral processes, data collection. employee information, incentives, problem identification and listening.

“An important step in assessing culture is to determine who owns it,” the report says. “While the ultimate responsibility should rest with the board, that is not the case in many organizations. Top management should take primary responsibility for the day-to-day culture of an organization. A cultural dashboard with a variety of metrics is a great way for businesses to collect and monitor information related to an organization’s culture in a holistic way. Organizations should mobilize cross-functional teams or committees to determine the best way to obtain information for effective assessment.

The four organizations have worked together for years on ways to deter fraud. “Building on the decade-long efforts of the Anti-Fraud Collaboration to raise awareness of the influence of corporate culture on conduct, this white paper emphasizes the effectiveness of regular assessment in deterring and detect elements of the culture that can serve as breeding grounds for misconduct. ”, Said CAQ General Manager Julie Bell Lindsay in a press release. “With the hands-on oversight described here, corporate culture can be a valuable asset in reinforcing desired behaviors, mitigating risk, and maintaining market and shareholder confidence. ”

In addition to discussing the importance of organizational culture, the white paper outlines some of the roles and responsibilities for maintaining and influencing culture, which typically fall on boards of directors and senior management.

“It is well established that companies with a strong ethical culture can better resist fraud,” FEI CEO Andrej Suskavcevic said in a statement. “FEI urges business leaders in the finance function and beyond to consult this publication to guard against financial fraud. ”

“Maintaining a healthy corporate culture is a complex task that requires sustained effort at many levels,” The IIA President and CEO Richard Chambers (photo) said in a statement. “By taking a closer look at the culture assessment process, this new resource from the anti-fraud collaboration will help internal auditors and others deal with this complexity. ”

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