Preventing corporate fraud is good business

30-November-2010 Fraud and Insolvency By Mark Streeter

When USA based WorldCom Inc fell victim to an $11 billion accounting scandal it resulted in the company filing for bankruptcy. In 2002 it was the largest bankruptcy in US history. Corporate fraud occurs in Australian businesses.  Most business fraud is opportunistic so could be prevented.

Some of the lessons learned in the WorldCom collapse are explained in a video called Fraud and the tone at the top . This is a training video designed to help business owners prevent corporate fraud.

The video includes interviews with one of those charged and sentenced to a jail term for their role in commercial fraud.
He explains how he was able, and even encouraged, to manipulate accounting records. The culture of the leaders encouraged questionable ethics and even them having a written “Code of Ethics” was seen as helping staff avoid moral analysis of their actions.

Some of the commercial fraud started seemingly innocently enough with delaying write offs of accounts receivables. As staff were remumnerated on profit and results there was incentive to make revenues look better than they actually were. Actions were justified with a belief that they could be fixed in the future when things improved.

The setting of unreasonable goals combined with poor communication is seen as partly to blame for the fraud. Where loyalty is not displayed staff can become loyal only to themselves

The video is a reminder that preventing corporate fraud is good business.

To watch the 20-minute video click here: Fraud and the tone at the top

Do you suspect corporate fraud? Ask for a free white paper:
 Workplace Fraud Investigation. How to uncover it, prevent it, stop it

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Written by Mark Streeter

Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!

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