Good fraud risk management practice should run through an organisation like the lettering in a stick of seaside rock. That’s according to the Fraud Advisory Panel (FAP).
In its annual review the panel, a charity, warns that new communications technologies, economic globalisation and the challenge of global warming are all helping to increase the intensity and complexity of fraud risks.<br><br>Rosalind Wright, Chairman of the Fraud Advisory Panel, said: “Fraud and dishonesty can undermine every aspect of an organisation, from staff morale to customer confidence, from the brand to the balance sheet. Organisations need to fight fraud both within their operations and throughout their relationships.<br><br>“How a company manages its fraud risks is a vital part of good corporate governance. Governance failures – and especially those in which fraud and dishonesty play a part – can cause lasting damage to corporate reputation and value, making all of us – customers, employees and shareholders – the real victims. Governance of fraud is therefore more than just a company thing – it’s a commitment to society.”<br><br>Good fraud risk management is now an essential part of good corporate governance, but the very nature of fraud risk has changed too. So many fraud risks are so well camouflaged that in reality it can be very hard to understand the threat. Ros Wright added: “To do so, organisations first need to raise their heads and survey the commercial environment as it really is, in all its complexity and confusion, and to tackle fraud risk factors wherever they are found. Nothing less than a truly concentrated approach will do.”<br><br>Increasingly there are large overlaps between the risks arising from cybercrime, bribery and corruption, money laundering and fraud. Meanwhile, new and unfamiliar fraud vulnerabilities are bringing with them the risk that even the vigilant can be caught unawares. Fraud defences are being weakened further by cuts in public services; including law enforcement and renewed political uncertainty about the future of our fraud-fighting agencies. To tackle all of this properly it must be tackled systematically and comprehensively, says Mrs Wright: “The time has come for organisations to take a properly organisation-wide approach to fraud risk management. Good fraud risk management practice should be a set of ideas, principles and practices which are so deeply embedded that they underpin everything an ethical, secure and risk-aware organisation does. It should run through an organisation like the lettering in a stick of seaside rock.”<br><br>The panel is running a conference with the Chartered Institute of Internal Auditors on November 7, at the Chartered Accountants’ Hall, London.<br><br>The Fraud Advisory Panel is a registered charity which works to raise awareness of the damage caused by fraud and to help individuals and organisations develop effective strategies to prevent it. It was established in 1998 by the Institute of Chartered Accountants in England and Wales (ICAEW). Visit –
