{"id":9353,"date":"2020-09-25T23:04:47","date_gmt":"2020-09-25T21:04:47","guid":{"rendered":"https:\/blindsided-by-fraud-skepticism-can-shine-a-light\/"},"modified":"2020-09-25T23:04:47","modified_gmt":"2020-09-25T21:04:47","slug":"blindsided-by-fraud-skepticism-can-shine-a-light","status":"publish","type":"post","link":"https:\/\/vaa.lt\/en\/blindsided-by-fraud-skepticism-can-shine-a-light\/","title":{"rendered":"Blindsided by Fraud: Skepticism Can Shine a Light"},"content":{"rendered":"

New report explores steps to identifying and fighting fraudulent activities<\/em><\/p>\n

LAKE MARY, Fla. (September 28, 2020) \u2013 One of the most effective safeguards for protecting against fraud is the attentive, watchful eye of others, whether that\u2019s management, employees, or governing bodies. It\u2019s not always about policing, but about leveling an \u200b<\/a><\/p>\n

appropriate amount of scrutiny. Many of those involved in the financial reporting supply chain, for example, believe their organizations exhibit more trust than skepticism when it comes to deterring and detecting financial statement fraud.<\/p>\n

\u201cSkepticism in Practice<\/a>,\u201d a new report by the Anti-Fraud Collaboration, a cooperative dedicated to enhancing the effectiveness of financial fraud risk management, explores the importance of more critically assessing the potential for fraud and examining some of the biases that can leave organizations blind to deceptive activities. A healthy dose of skepticism is key.<\/p>\n

\u201cOftentimes, we view the activities of others through the lens of our own experiences and biases,\u201d said Richard F. Chambers, CIA, QIAL, CGAP, CCSA, CRMA, President and CEO of The Institute of Internal Auditors (IIA), sponsor of this white paper. \u201cAs a result, we may not recognize the potential these biases have in our ability to fully consider those activities and identify potential problems. That\u2019s where skepticism comes in. It allows us to avoid being blindsided, and to not simply accept certain practices as appropriate. Importantly, skepticism helps us to root out fraud.\u201d<\/p>\n

Executing appropriate skepticism takes time and training, and it is important to strike a balance between optimism and healthy skepticism, according to \u201cSkepticism in Practice.\u201d With that as a backdrop, the report provides some of the tools and techniques needed to shift organizations toward a better balance between trust and skepticism as it relates to fraud and other important considerations.<\/p>\n

\u201cThis report emphasizes the importance of all members of the financial reporting supply chain to not only be aware of unintended biases that may exist, but also to recognize the potential impact that these biases can have on their ability to exercise skepticism,\u201d said Andrej Suskavcevic, CAE, President & CEO of Financial Executives International (FEI). \u201cAnd like unconscious biases, new technologies can pose a threat to skepticism that\u2019s easily overlooked. The very fact that emerging technologies are greeted with great fanfare and anticipation reinforces the importance of maintaining skepticism in considering the information they deliver \u2013 or conceal.\u201d<\/p>\n

A key element of effective skepticism is to ask tough questions, especially during a crisis when there may be efforts to show success where none may exist. \u201cTo emerge successfully from a crisis, it is crucial to focus on both good and bad outcomes,\u201d said Peter R. Gleason, CEO of the National Association of Corporate Directors (NACD). \u201cWhen faced with surprising results, leaders should ask how an individual or a business unit got such phenomenal results. One solid piece of advice in this paper is to assume nothing, and check everything.\u201d <\/p>\n

\u201cSkepticism in Practice\u201d presents two key steps in using skepticism in deterring and detecting fraudulent activity, including:<\/p>\n

    \n
  1. Recognize the limits of your own objectivity.<\/li>\n<\/ol>\n

    This involves being keenly aware of a tendency to make assumptions; be sure to ask tough questions; admit that you may have made an error, then take corrective actions in your assumptions; understand how to employ varying levels of skepticism depending on the circumstances; and keep in mind that the output is only as good as the input, so even automated information may not be reliable.<\/p>\n

      \n
    1. Don\u2019t jump to conclusions.<\/li>\n<\/ol>\n

      Keep an eye out for additional, possibly contradictory information; look beyond the obvious or even what your gut is telling you (confirmation bias); and don\u2019t hesitate to seek out additional information to confirm \u2013 and reconfirm \u2013 your initial findings.<\/p>\n

      \u201cCOVID-19 and the resulting remote work environment are heightening the risk of fraud at public companies,\u201d said Julie Bell Lindsay, Executive Director of the Center for Audit Quality (CAQ). \u201cStrong fraud detection and deterrence requires all participants in the reporting system \u2013 especially public company management, whose ultimate responsibility it is to design and implement controls to deter and detect fraud, but also audit committees, internal auditors and the external auditors \u2013 to exercise skepticism.\u201d <\/p>\n

      \u201cSkepticism in Practice<\/a>\u201d is available for download through The IIA<\/a> and the Anti-Fraud Collaboration<\/a>. <\/p>\n

      Chambers and CAQ\u2019s Margot Cella, Vice President, Research and Anti-Fraud Initiatives, discuss the role of skepticism in deterring and detecting fraud, how to effectively exercise and enhance skepticism, and proactive steps to overcome challenges posed by the COVID-19 crisis in this CAQ Anti-Fraud In Action video<\/a>.<\/p>\n

      Media contacts:<\/strong>
      IIA: John Babinchak, 407-937-1240,       john.babinchak@theiia.org<\/a>
      CAQ: Ben Edwards, 202-641-5594,       bedwards@thecaq.org<\/a>
      FEI: Lili DeVita, 973-765-1021,       ldevita@financialexecutives.org<\/a>
      NACD: Susan B. Oliver, 703-216-4078,       susanboliver@gmail.com<\/a><\/p>\n

      About the Anti-Fraud Collaboration<\/strong>
      The       Anti-Fraud Collaboration<\/a> is dedicated to advancing the discussion of critical anti-fraud efforts through the development of thought leadership, awareness programs, educational opportunities, and other related resources focused on enhancing the effectiveness of financial fraud risk management. The collaboration represents the combined efforts of the Center for Audit Quality<\/a>, Financial Executives International<\/a>, the National Association of Corporate Directors<\/a>, and The Institute of Internal Auditors<\/a>, organizations that actively engage in efforts to mitigate the risks of financial reporting fraud.<\/p>\n

      \u200b<\/p>","protected":false},"excerpt":{"rendered":"

      New report explores steps to identifying and fighting fraudulent activities LAKE MARY, Fla. (September 28, 2020) \u2013 One of the most effective safeguards for protecting against fraud is the attentive, watchful eye of others, whether that\u2019s management, employees, or governing bodies. It\u2019s not always about policing, but about leveling an \u200b appropriate amount of scrutiny. […]<\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"class_list":["post-9353","post","type-post","status-publish","format-standard","hentry","category-iia-naujienos"],"featured_image_src":{"landsacpe":false,"list":false,"medium":false,"full":false},"_links":{"self":[{"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/posts\/9353","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/comments?post=9353"}],"version-history":[{"count":0,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/posts\/9353\/revisions"}],"wp:attachment":[{"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/media?parent=9353"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/categories?post=9353"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/tags?post=9353"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}