Complex business practices open the door to fraud
Contradictions in managing financial data is opening the door to corporate fraud in the UK, says new survey.
LONDON – A new survey of more than 60 audit and financial executives in the UK and Germany has found that the complexity of today's business operations is opening the door to corporate fraud in the UK. It also highlights the fact that inherent contradictions in managing financial data create a confused environment where non-compliance and fraudulent activity can go unchecked and unnoticed.
Although more than 77% of respondents to the survey, conducted by ACL Service,s agreed a single view of all relevant financial data was vital to effectively meeting today's corporate governance requirements, less than a quarter of organisations have this complete picture – leaving many of the companies surveyed vulnerable to inefficiencies and fraud.
Despite this, however, 81% still felt confident about being able to meet financial compliance and governance obligations.
Further contradictions and challenges were highlighted in the survey. Some 84% of respondents agreed that continuously monitoring the internal controls of key business processes would ensure operational and financial integrity, but only 43% were planning to do so, or had deployed these techniques.
Some 57% currently perform financial audits either quarterly or annually, and only 27% say they would like to carry out audits more frequently (such as daily or weekly). This is despite an awareness of the benefits of reacting promptly when internal controls are not working as intended.
And of the companies surveyed, 42% do not know how long a suspect transaction outside internal control parameters could go unnoticed, and nearly one third believe an anomaly could go unnoticed for more than six months.
“These results illustrate the true complexity of managing financial data across organisations. While many financial professionals acknowledge the challenges, many appear unable to implement the organisational changes necessary - despite the clear business benefit,” says Liz Maloney, regional director of EMEA for ACL.
“The majority of executives surveyed believe they have effective processes in place, but by not continually monitoring their financial transactions, UK organisations are leaving themselves open to fraudulent activities and organisational inefficiencies that can severely affect the bottom line,” she adds.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
‘It’s not EU’: Do government bond spreads spell eurozone break-up?
Divergence between EGB yields is in the EU’s make-up; only a shared risk architecture can reunite them
CFTC weighs third-party risk rules for CCPs
Clearing houses could be required to formally identify and monitor critical vendors
Why there is no fence in effective regulatory relationships
A chief risk officer and former bank supervisor says regulators and regulated are on the same side
Snap! Derivatives reports decouple after Emir Refit shake-up
Counterparties find new rules have led to worse data quality, threatening regulators’ oversight of systemic risk
Critics warn against softening risk transfer rules for insurers
Proposal to cut capital for unfunded protection of loan books would create systemic risk, investors say
Barr defends easing of Basel III endgame proposal
Fed’s top regulator says he will stay and finish the package, is comfortable with capital impact
Bank of England to review UK clearing rules
Broader collateral set and greater margin transparency could be adopted from Emir 3.0, but not active accounts requirement
The wisdom of Oz? Why Australia is phasing out AT1s
Analysts think Australian banks will transition smoothly, but other countries unlikely to follow