Preventing corporate fraud is good business30-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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