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

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Presentation on theme: "Process / Ethical Governance How Far Have We Gone……………."— Presentation transcript:

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

2 PREVALENCE OF FRAUD Fraud is a Worldwide Phenomenon!!! Fraud may take any shape: FRAUD Enterprise Fraud Internet Fraud Job Scams Ponzi / Pyramid Scemes Social FraudBank Fraud Lottery Fraud Credit Card Fraud Insurance Fraud Matrimonial Fraud Internal Factors External Factors

3 MEASURES AGAINST FRAUD ACTs, Rules, Regulations and Anti-Fraud Offices. FCPA / OFAC ANTI-MONEY LAUNDERING THE UK BRIBERY ACT SFIO OLAF and CIFAS, UK UNICORN OECD / SOCA BORYOKUDAN HAIJOJOREI THE DOD-FRANK ACT

4 IMPACT OF MEASURES Preventive and Reactive Measures. Preventions Reactions What are These?

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. Corporate Fraud Execution of norms? Risk Culture? Fraudsters with unique conduit? Stuck with old processes? Out of box thinking? Internal Controls? Personality tests for Senior positions? Ethical Governance?

7 WHAT IS COMMON AMONGST FRAUDSTERS? Psychology!!! Greed? Situation? Exposure? Religion? Color? Race?

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 Termination due to managements fault Fake identities Indirect undesirable associations Operating in Gray Areas!!! 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

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 Dont distrust key people – Govern them!!!

18 QUESTIONS and ANSWERS…………..

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