Internal Audit Insights

There tends to be a fair amount of confusion when it comes to a fraud risk identification approach versus an experience-based approach but here we set out to create a list of universal definitions intended to clarify how and why you might use this approach.

As Dirty Money Constellations continue to move from the “Islands of Shame” to the re-emerging epicenters of power, should we just be passive observers or is there something we can do?

In this second installment of our two-part series on vendor overbilling, we look at how to use fraud data analytics designed to uncover a complex fraud scheme and the fraud audit procedures designed to provide credible evidence.

Fraud expert and MISTI instructor, Leonard Vona, selected a complex corruption scheme and a complex overbilling scheme to illustrate how fraud auditing can detect even the most complex schemes.

Fraud and corruption are all around us. As internal auditors, if we're so heavy handed with the few “sinners” we catch, won’t the large majority who didn't get caught breath a huge sigh of relief and just try even harder to stay hidden?

Boards of directors, stockholders, management teams, and professional standards all expect internal auditors to respond to the risk of fraud in core business systems.

In the latest edition of our video series "MISTI on Audit," Joel F. Kramer, vice president of audit curriculum at MIS Training Institute, talks about internal audit's role in detecting and preventing fraud.

Despite vigorous efforts by regulators in the United States and Europe to punish bribery, it still plagues many parts of the world.

Two former company accounting executives also agree to settle charges, including fines and suspensions.

With news of several frauds at U.S. companies making headlines, some internal auditors are looking to increase their fraud-finding skills.

As the fallout from the Wells Fargo fraud case continues, several questions still linger. Chief among them is if CEO John Stumpf will continue to hang on to his job.

It's often said that the regulatory response to a large financial scandal or series of frauds will be swift and sweeping and that it will do absolutely nothing to stop the next series of frauds or scandals.

It's not easy to be an internal auditor at a public entity in Africa. "It takes a lot of bravery," said Graham Joscelyne, chair of the audit and ethics committee at the Global Fund to Fight Aids.

In December 2007, I was appointed as the Inpsector General of the Securities and Exchange Commission and served in that capacity until January 2012. An IG is an internal watchdog for a governmental body with its primary purpose being to identity and reduce waste, fraud, and abuse in the agency. IGs supervise both internal audit and investigative units.

The Securities and Exchange Commission has charged South American-based LAN Airlines with making illegal payments to attempt to settle a labor dispute, in violation of the Foreign Corrupt Practices Act.

A new report finds that the majority of large, multinational companies based in emerging markets, including China and Brazil, are falling down on their responsibility to provide transparent corporate reporting.

Corporate frauds are cyclical, meaning that they tend to come in waves, particularly when the markets perform poorly or a recession hits. (That is, when the scandals themselves aren't the actual cause of the recession as we saw in the financial crisis of 2008.)

Warren Buffet, the king of folksy, one-liner investment aphorisms, has one for the problems that a bear market can cause: "It's only when the tide goes out that you can see who has been swimming without their trunks on."  

Companies are paying a huge price for worldwide corruption and bribery, even if they are adopting practices to fight against it. That's because the cost of corruption takes many forms, including loss of business to less scrupulous companies, and regulatory requirements.

Bad news for internal auditors, compliance executives, and risk managers who were hoping that bribery and corruption risks would start to subside after being on high alert for the last few years: they are actually increasing.

This week the Securities and Exchange Commission settled a case with Mass.-based technology company PTC Inc. and its Chinese subsidiaries that could create new imperatives for internal audit practices and assurance of anti-bribery programs.