Fraud concerns keep managers awake at night

Fraud, bribery and corruption are the main personal liability concerns of some 61 percent of respondents to the Ernst & Young (E&Y) Global Fraud Survey. Consistent with the indicated level of concern by Romanian boards for their liability arising from fraud, only 62 percent of organizations surveyed locally had conducted a fraud risk assessment in the last two years, and only 29 percent in the last six months.

“Given the pressure on corporate resources, prioritizing anti-fraud and anti-corruption efforts is essential. Regularly scheduled assessments of risks, in particular businesses and markets, are prudent and help those in risk management functions to triage the most pressing situations,” said David Stulb, E&Y’s global fraud investigation & dispute services leader.

Considering the mechanisms through which organizations can seek to mitigate their risk of fraud occurring, Romanian respondents indicated education and communication on anti-fraud policy as the most effective step, followed by internal inspections, internal audit and management reviews.

Switching to efforts to detect fraud, Romanian organizations appear to place significant trust in internal audit.

“Anti-fraud activities can reduce the financial cost of fraud to an organization through helping to detect existing or reducing the risk of future fraudulent activities occurring. Savings to an organization by reducing the cost of fraud usually far outweigh the cost of undertaking anti-fraud activities,” said Stulb.

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The survey was taken between November 2009 and February 2010. In Romania, 28 interviews out of a total of 1,409 were conducted with officers in the roles of CFO, head of legal, head of internal audit or chief compliance officer within medium to larger Romanian businesses.

Staff