Coming Together to Talk Fraud
Posted on August 22nd, 2008 by Audit Trail »Permalink
Last month, I attended the 19th Annual Fraud Conference, organized by the Association of Certified Fraud Examiners (ACFE) in Boston. It was a very full three days, as internal auditors, fraud examiners, and folks like me gathered to talk and listen about corporate fraud and how a company’s vital assets can be endangered by a corporate “psychopath,” a term used to describe someone who wakes up every morning thinking of ways to steal a company’s time, money and resources.
A good bit of the conference explored the regulation most relevant to Certified Fraud Examiners (CFEs) – SAS 112, which regulates fraud prevention. SAS 112 is a roadmap to prevent fraud the same way that SOX is a roadmap to compliance. But of course SOX isn’t just about compliance. Compliance, rather, is about meeting the requirements that SOX lays out for – you guessed it, preventing fraud of the Enron, Worldcom, Societe Generale variety.
The experience was eye-opening for many reasons. Perhaps most striking to me was that, despite a serious focus during the event on fraud prevention and ways that companies can minimize the risk of fraud, there was very little awareness in the marketplace about the automated solutions that can be so instrumental to a successful fraud prevention program.
So much emphasis has been given to Sarbanes-Oxley in recent years and its requirements for separating duties, limiting user access, and providing operational visibility to company leadership that it seems as if the ultimate goal of SOX – preventing fraud – has been lost in the jargon jungle. That seems the most likely explanation for how an audience of compliance folks and internal auditors could be so aware of the role that automated controls and controls intelligence can play in compliance programs, yet unaware of how the very same solutions work to prevent fraud. It’s remarkable, considering that automated solutions for SOD, user access and the like were designed to prevent fraud in the first place.
Perhaps these parallel discussions of fraud are why so few of my colleagues at the conference indicated awareness of or familiarity with technological solutions that can bring crucial visibility to fraud prevention that builds efficiency for overall operations.
Whatever the reason, it’s clear that we need to be explicit about the very real business problems that technology can solve for companies needing to detect and prevent fraud, have true visibility into operations, and conduct business as efficiently as possible. The stakes couldn’t be much higher.
Tags: corporate fraud, Controls Intelligence