Fraud is always a hot topic for companies, large and small. While preparing for year end is an excellent time to evaluate the effectiveness of controls in place, there is a lot that can be done on a regular basis to help mitigate risk. Organizational culture is a significant factor at play when assessing fraud. While a fraud reporting hotline is good practices and strongly encourage, there are other organizational characteristics that are beneficial. Staff should be comfortable bringing any concerns to their direct reports. Employees should be open to recommendations and teams willing to work together to make appropriate changes towards improvement.
Per the AICPA, other indicators of a strong company culture include:
- Existence of strong governance and clear policies and procedures
- Communication of these policies across the organization
- Application of policy and procedures to all levels of management, no exceptions
- Alignment of rewards with the right behaviors
Article written by:
Meghan Buxton, CPA