Fraud Prevention Tops Corporate Boards' To-Do Lists
FIRSTGlobal Investigations, a division of BDO Seidman LLP, predicts that fraud prevention will top priority lists for many corporate boards in the coming year.
Boards had to focus on complying with the internal control requirements of the Sarbanes-Oxley Act last year, but putting training programs in place to prevent fraud should attract greater attention this year, the Sarbanes-Oxley Compliance Journal reported. Changes to the Organizational Sentencing Guidelines made fraud prevention activities the responsibility of the board of directors.
FIRSTGlobal also foresees that both private companies and non-profit organizations will step up their fraud prevention activities. Venture capitalists and independent directors will pressure private companies to improve fraud detection, while major donors will do the same at non-profits, says FIRSTGlobal, which is made up of former federal prosecutors, FBI agents, certified fraud examiners, computer forensics experts and other specialists in fraud prevention and recovery.
More predictions for 2005:
Forensic SWAT Teams - Watch for companies to call in outside forensic accountant to examine possible problem areas in accounting and operations.
Whistleblower Hotlines - Since Sarbanes-Oxley required a method for anonymous tipsters to make complaints, more employees may feel comfortable using whisteblower hotlines in 2005.
Increasing Power of the Auditor - With increased responsibility and risk placed on auditors by Sarbanes-Oxley, more auditors will request an independent investigation if potential problems are discovered.
Real-Time Cyber-Sleuthing - New software will allow corporations to detect “red flags” of potential accounting fraud or other types of financial misconduct.
You may download a copy "Accounting Year In Review: 2004 From BDO Seidman".
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.