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Process / Ethical Governance

Process / Ethical Governance. How Far Have We Gone……………. Prevalence OF FRAUD. Fraud is a Worldwide Phenomenon!!!. Fraud may take any shape:. Measures AGAINST FRAUD. ACTs, Rules, Regulations and Anti-Fraud Offices. Impact of Measures. Preventive and Reactive Measures. FRAUD IS INEVITABLE.

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Process / Ethical Governance

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  1. Process / Ethical Governance How Far Have We Gone…………….

  2. Prevalence OF FRAUD Fraud is a Worldwide Phenomenon!!! Fraud may take any shape:

  3. Measures AGAINST FRAUD ACTs, Rules, Regulations and Anti-Fraud Offices.

  4. Impact of Measures Preventive and Reactive Measures.

  5. FRAUD IS INEVITABLE Avoid, Reduce, Share or Accept!!! • Lawsuit alleges SEC failure to perform ‘nondiscretionary’ function? • Dodd-Frank won't prevent another financial crisis?

  6. frauds are Inevitable, why? Organizations are still people dependent.

  7. What is common amongst fraudsters? Psychology!!!

  8. Vulnerable to Psychology? Govern the Processes!!!

  9. Learning from the past Have we actually learnt from the past ??? • Libor Fraud; • Bernard Madoff Case; • Satyam Scam; • Illegal gold-futures trading scam in China; • Olympus Accounting Scam or AIJ billion dollar pension scandal of Japan; • As small as Wal-Mart fraud and Toilet Paper fraud.

  10. Process / Ethical Governance Reiterate the culture of governing the processes. • Differentiate Policies from Processes. • Ethical Governance is an integral part of Process Governance. • No one shall be spared from passing the test of Ethics.

  11. Real time investigations Lax Processes; Stringent Policies • Grant Fraud • Whose kitty is this? • Procurement Fraud • Use of authority for whose benefit? • Employee Retention • Solution within the problem!

  12. Real time investigations Flexible Policies; Stringent Processes • Robust Hiring Process • Too strong to be broken. • Cash Rich Industry • No one at fault. • Personality Clash • Importance for the organization.

  13. Miscellaneous – Real time investigations Operating in Gray Areas!!! • Termination due to managements’ fault • Fake identities • Indirect undesirable associations Even as global literacy rates are high (84%), people are reading less and less deeply.

  14. Fraud and Psychology Personality Test – Pre / Post Fraud? Personality Test Abuse of authority Not using authority Giving a wrong direction to the organization

  15. Monitor the monitor - Who? Abuse of Authority is a type of Faud!!! • Peregrine Financial Group • ‘With careful concealment and blunt authority, CEO was able to hide fraud from others.’ • Rajat Gupta – it was greed for more • Who checked him not to divulge? • JP Morgan • Firm's handling of trading in synthetic credit securities was “flawed, complex, poorly reviewed, poorly executed and poorly monitored.” • Bank of America's user authentication scam • Weakness in the banks KYC system.

  16. process/ethical governance – other aspects of life • Follow a routine to live long. • Work – Life Balance. • Fight against evil in society. • Struggle or strive for goals. Make it a

  17. Take-Away Don’t distrust key people – Govern them!!! MAKE PROCESSES STRONG PERSONALITY MATCH WITH POSITION GOVERN EVERYONE FOR ETHICS

  18. QUESTIONS and ANSWERS…………..

  19. THANKYOU!

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