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Managing fraud risk

Being prepared

In today’s time investors and shareholders raise expectations for ethical behavior of organization they are associated. The regulatory bodies worldwide have also increased financial/criminal penalties that can be levied against organisations and individuals (including management members) who are involved in committing fraud.

Regulations such as the U.S. Foreign Corrupt Practices Act of 1977 (FCPA), the 1997 Organisation for Economic Co-operation and Development Anti-Bribery Convention, the U.S. Sarbanes-Oxley Act of 2002, UK Bribery Act, Prevention of Corruption Act 1985 and other similar legislations throughout the world have increased management’s responsibility towards fraud risk management.

What is Fraud?

Fraud is essentially defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage.