Washington, DC – Improved accounting policies and internal controls are key for stemming fraud and reducing the number of financial restatements, according to a new report from the Anti-Fraud Collaboration. The report, Addressing Challenges for Highly Subjective and Complex Accounting Areas, compiles leading-practice recommendations from dozens of company executives, corporate directors, auditors, and regulators who attended two 2016 workshops to discuss ways to help deter fraud and enhance financial reporting.
“Companies are sharing leading practices and voluntarily working with regulators to help deter and detect financial reporting fraud,” said Cindy Fornelli, executive director of the Center for Audit Quality (CAQ), on behalf of the Anti-Fraud Collaboration. “The Anti-Fraud Collaboration is pleased to present these recommendations to help companies improve their accounting policies and system of internal controls. Investors, our capital markets, and public companies all win when we work together to combat fraud.”
The Anti-Fraud Collaboration held workshops in New York and San Francisco that brought together members of the financial reporting supply chain, including regulators, audit committee members, financial executives, internal auditors, and external auditors.
The workshops explored issues that were identified in an analysis of enforcement actions in which the U.S. Securities and Exchange Commission (SEC) took an action against an issuer or individual because of a securities violation and asserted that there were serious issues with the companies’ internal controls. The workshops also examined case studies as a catalyst for the discussions.
The report makes key recommendations concerning company accounting policies:
The report also outlines key recommendations regarding internal control over financial reporting (ICFR):
“Our members are highly committed to the deterrence and detection of fraud and are focused on their responsibility toward that effort, which includes overseeing the preparation of accurate financial information and the importance of designing, monitoring, and maintaining effective internal control over financial reporting,” said Andrej Suskavcevic, CAE, president and CEO, Financial Executives International (FEI). “We fully support the efforts of the SEC to promote cooperation and self-reporting.”
“Successfully battling fraud in financial reporting requires strong collaboration among all the principal players,” said Institute of Internal Auditors (IIA) President and CEO Richard F. Chambers, CIA, QIAL, CGAP, CCSA, CRMA. “This report is built on such collaboration and offers valuable direction and insight on improving accounting policies and internal control over financial reporting.”
“The sharing of leading governance practices is an essential element of effective board leadership,” said National Association of Corporate Directors (NACD) President and CEO Peter Gleason. “While this report is an important guide for all corporate directors, it will be especially of interest to our public company audit committee members.”
Coming to Terms with Short-Termism: Implications for Fraud
Date: Thursday, July 7, 2016
Time: 1:00 p.m.– 2:30 p.m. (EDT)
Goals for long-term value creation for a company’s investors may conflict with incentives that are introduced by short-term pressures, such as analysts’ expectations, internal profit targets, and compensation bonuses tied to short-term performance metrics. Emphasis on short-term results can increase the risk of financial reporting fraud if there isn’t alignment between the short-term goals and the long-term strategy. Organizations may not fully appreciate the long-term impact that the need to meet or beat short-term expectations—from the Street, or even from a supervisor or business unit leader—has on the actions that employees take. And employees may not fully realize the implications to the long-term strategy of the decisions they make when they give in to those pressures.
Learn how audit committees, financial executives, and internal auditors can help to improve the connection and identify ways to mitigate the risks of short-termism, and how the external auditors factor those risks into their audit planning and scoping. Our panel of experts will discuss what successful companies do to reinforce the alignment between potentially conflicting goals, and provide actionable recommendations that each supply chain member can implement in their organizations.
We encourage all of the key players in the financial reporting supply chain—audit committees, financial executives, internal auditors, and external auditors—as well as compliance professionals, to register for this informative program.
The Conference Board Governance Center
Senior Managing Director
Brock Capital Group
Executive Consulting Group
Center for Audit Quality
Free-of-charge ethics courses can be taken online for CPE credit
Washington, DC – Leveraging its successful series of webcasts, the Anti-Fraud Collaboration today unveiled a set of online self-study courses for corporate ethics training. Housed on the learning platform of the American Institute of CPAs, the courses can be taken free of charge and with the potential of earning up to two continuing professional education (CPE) credits per course.
The self-study program—suitable for accountants, financial executives, directors, external and internal auditors, and other members of the financial reporting supply chain—tracks the topics covered during the webcast series. The courses are the following:
For each course, a panel of experts examines the topic at hand from a variety of perspectives. Panelists in the webcast series have included, among others, leading public company auditors, law partners, internal audit executives and chief ethics compliance officers, as well as representatives from the director and regulatory communities.
“At companies of all sizes, the importance of sound ethics in deterring and detecting financial fraud cannot be understated,” said Center for Audit Quality Executive Director Cindy Fornelli. “We are pleased that the abundance of perspectives, tips, and best practices on ethics programs shared during these webcasts can be of even greater value through the added structure of this self-study series.”
“Resources such as these online ethics courses are precisely what we envisioned when we formed the Anti-Fraud Collaboration five years ago,” said Michele Hooper, President and CEO of The Directors’ Council and Co-Chair of the Anti-Fraud Collaboration. “Together, we are leveraging the collective expertise of these organizations for the benefit of all.”
The new online courses build on an impressive and growing platform from the Anti-Fraud Collaboration.
“Our mission at Financial Executives International is to advance the success of financial executives, their organizations and the profession. Integrity and ethics are facets that are core to the values of financial executives, and key to their success. This self-study series offered by the Anti-Fraud Collaboration provides valuable tools in building awareness of financial fraud, deterrence, detection and reporting best practices,” said Andrej Suskavcevic, President and CEO of Financial Executives International. “We look forward to the success of these courses as they continue to educate the industry on ethics.”
“NACD is proud to be a part of the Anti-Fraud Collaboration and welcomes this new self-study series to foster greater integrity in financial reporting and corporate culture,” said Ken Daly, CEO, National Association of Corporate Directors. “Working together, directors, auditors, financial executives, and internal auditors can make a positive difference for our companies and the global economy.”
“Having a strong ethical corporate culture is fundamental to good governance,” said The Institute of Internal Auditors President and CEO Richard Chambers, CIA, QIAL, CGAP, CCSA, CRMA. “A robust ethical corporate culture helps deter and detect financial reporting fraud. These online, self-study courses are another valuable contribution to the body of work of the Anti-Fraud Collaboration.”
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About the Anti-Fraud Collaboration
The Anti-Fraud Collaboration represents the collaborative efforts of the Center for Audit Quality, Financial Executives International, The Institute of Internal Auditors and the National Association of Corporate Directors, organizations that actively engage in efforts to mitigate the risks of financial reporting fraud. The Collaboration’s goal is to promote the deterrence and detection of financial reporting fraud through the development of thought leadership, awareness programs, educational opportunities, and other related resources specifically targeted to the roles and responsibilities of participants across the financial reporting supply chain.
For Further Information
Center for Audit Quality
Erica Hurtt, Senior Director of Communications
Financial Executives International
Lili DeVita, Vice President, Marketing and Communications
National Association of Corporate Directors
Henry Stoever, Chief Marketing Officer
The Institute of Internal Auditors
Robert Perez, Manager, Media Relations
Date: Tuesday, October 27, 2015
Time: 2:00–4:00 p.m. (EDT)
An emerging trend is the use of data analytics to detect and deter fraud. Data is the most robust asset an organization maintains. How can it be used to help companies pinpoint and identify manipulations? Join a panel of experts as they discuss the foundations of data analytics and how companies can implement analytics within their own organization. The webinar also will explore how companies can move from ad hoc analyses to more proactive continuous detection using advanced tools. And finally, the webinar will provide participants with an action plan for what they can do today to prepare to use data analytics to deter and detect fraud.
We encourage all of the key players in the financial reporting supply chain—audit committee members, financial executives, internal auditors, and external auditors—as well as compliance professionals, to register for this informative program.
This program is FREE of charge and eligible for 2 CPE Specialized Knowledge and Application credits.
The webinar will be archived on the Videos page of the Anti-Fraud Collaboration’s website for those unable to participate during the live broadcast.
Data Analytics to Deter and Detect Fraud
Date: October 27, 2015
Time: 2:00–4:00 p.m. (EDT)
Chief Operating Officer
Financial Executives Research Foundation
Director, Forensics and Valuation Services
President, Audimation Services, Inc.
Advisory Partner, Forensics & Investigations
Deloitte Financial Advisory Services LLP
President & CEO
For more information, contact the Center for Audit Quality at (888) 817-3277 or email@example.com.
Additional resources on fraud deterrence and detection can be found at www.antifraudcollaboration.org.