EisnerAmper Expert Discusses “An Accountant’s View of Fraud and Corruption” on Podcast
June 10, 2021
Detecting fraud and corruption and maintaining compliance are among the most serious challenges facing businesses in the pandemic era. During this current crisis, the pressure on employees dealing with financial difficulties and job insecurity is exacerbated, it creates unprecedented opportunities for wrongdoers due to limited management oversight, and employees’ moral compasses can be pushed to the limit as people may enter a self-preservation mode. The challenges have been compounded by the inability to travel, and businesses have been neglecting their high-risk operations where corruption may be more rampant. As a result, companies have been forced to invest in data analytical solutions to mitigate risks so that corporate leaders can perform these functions in a remote work environment. While data analytics is a strong tool, it is not a substitute for diligent human oversight.
I was thrilled to have an opportunity to discuss EisnerAmper’s work in this crucial area with Richard Levick on In House Warrior, a daily podcast for the Corporate Counsel Business Journal, in an episode titled “An Accountant's View of Fraud and Corruption.” In his crisis communications practice, Richard has represented countries and companies in the high-stakes global communications matters, and he regularly advises CEOs, boards, lawyers and lobbyists to maximize efficiency and solve conflicts. The podcast is distributed daily by the Corporate Counsel Business Journal to its 40,000 subscribers, and recent guests have included Alan Dershowitz, John Dean, Andrew Young and Andrew McCabe. I was honored to be the first accountant in the show’s long history of prestigious guests.
We discussed bribery and corruption compliance, financial controls and problems that arose at companies that have been in survival mode for the past year. The Paycheck Protection Program also created rampant opportunity for fraud, given the scale and speed in which billions of dollars were dispensed. This created potential liability for lenders as well as reputational and other compliance risks.
I explained that leading surveys have indicated that fraud is on the rise, with every indication it will continue to rise over the next 12 months. This is due to a variety of factors, including executives’ increased pressure under financial constraints to meet targets and analyst expectations, along with the opportunities of the remote work environment. Fraud perpetrators also appear more likely to justify their actions because financial pressure can affect their moral compass.
EisnerAmper advises clients to follow a three-step approach: First, assess where your company is most vulnerable to fraud. Next, institute fraud mitigation procedures. Finally, actively monitor for fraud red flags.