What institutional fraud presents the greatest operational risk to companies? In a recent poll by Oversight Systems of 200+ Certified Fraud Examiners:
63% - Conflict of Interest
57% - Fraudulent Financial Statements
31% - Billing Schemes
29% - Expense and Reimbursement Schemes
25% - Bribery/Economic extortion
20% - Inventory and Non-Cash Asset Misuse
From the conviction of former WorldCom CEO Bernie Ebbers to the acquittal of HealthSouth’s Richard Scrushy, corporate fraud continues to make headlines. Four years after Enron’s collapse, financial integrity remains a key issue for corporate America.
The 2005 Oversight Systems Report on Corporate Fraud surveys certified fraud examiners to report the trends, risks and major concerns that businesses face today.
While most fraud examiners view Sarbanes-Oxley (SOX) as an effective tool in fraud identification, few think it will change the culture of business leaders. Nearly two-thirds of respondents (65 percent) indicate that SOX has been somewhat or very effective in identifying incidences of financial-statement fraud. Only 19 percent of those surveyed found SOX to be ineffective or serve to prevent fraud identification.
·What are the consequences of ignoring need for change related to operational risks?
·What will be a starting point for initiating changes related to operational risk management?
·Is your organization ready for managing changes in order to manage operational risk? If yes, at what readiness level? If no, how can it become ready?
Are you a boardroom director or senior corporate manager? Does your organization have a culture that avoids an examination of organizational processes such as decision-making, planning and communication concerning the risk of change? Are you an executive who would like your organization to accept, adapt and therefore institutionalize and legitimize these processes related to operational risk?
If you said yes to any the questions above and nodded positively to the possibility for a change in your organization, then first you must effectively
"Manage Strategic Change for Operational Risk".