according to the association of certified fraud examiners' 2002 report to the nation on occupational fraud and abuse, up to 6% of organizations' revenues were predicted to be lost in a single year. in the u.s., this translates into losses of $600 billion or about $4,500 per employee.
with such staggering figures, it is no wonder that most companies now need an effective fraud assessment program. while most companies have mandatory anti-fraud procedures in place, few understand all of the factors that must be considered when assessing risks and vulnerabilities. does your company know if its employees have a grasp of its established internal controls? are employees aware of the procedures and codes of conduct of your organization? this type of disconnect within a company exposes it to potential fraud schemes and ethical issues. integrity partners offers a comprehensive plan to evaluate your company's vulnerabilities, and develop, enhance and implement safeguards, effective corrective actions and internal controls to prevent or deter potential acts of fraud.
while some advisory firms offer a singular or "one size fits all" approach to assessing risk, integrity partners offers a personalized and dynamic methodology tied to the unique aspects and risk of each given industry. integrity partners works closely with management to reveal and address the vulnerabilities within the organization.
the nature and scope of an organization's risk assessment activities should be commensurate with the size and complexity of its operations. at times, it may be necessary for an organization to undergo an enterprise-wide assessment, such as an overall review of their policies on ethics and codes of conduct, management training, whistle- blower programs and data systems controls. some organizations may require an assessment of a limited area of risk based on specific concerns, such as anti-money laundering controls or physical security assessments.
integrity partners has the capabilities to perform a number of specific fraud prevention services. some of these services include:
clients and their legal counsel hire integrity partners to gather corporate intelligence and conduct due diligence when information is critical to the decision-making process.
business intelligence concerning potential business affiliates, partners, employees, vendors, and investments is an often overlooked but important aspect of business risk management and prevention. in a remarkable number of cases, an ounce of prevention is worth a pound of cure.
we utilize a global network of contacts and conduct research on sophisticated databases. some of the types of information we can obtain include:
financial reportscriminal backgrounds
sarbanes oxley compliance
in response to tyco, enron, worldcom and other corporate scandals, congress passed the sarbanes oxley act (sox) in june of 2002. this legislation marked sweeping reform for publicly-held companies that require tighter financial and non-financial disclosures, reporting guidelines, additional public oversight, and tougher criminal penalties for officers, directors, audit committee members, and advisers held responsible for improper reporting.
companies subject to sox must incorporate anti-fraud programs into their internal controls. in particular, section 404 of the act addresses corporate internal controls. under 404, company management should assess its internal controls covering key processes, and implement measures where necessary. controls should be tested and detailed documentation of the assessment, implementation and testing must be provided. upon completion external auditors must attest to the adequacy of management's assessment and evaluation of a company's controls.
sox has many other requirements, for example, section 404 places responsibility on audit committee members to establish a whistleblower program to allow employees, officers or any stakeholder to report potential financial misdeeds. additionally, sox also calls for a formal code of ethics or conduct to be issued and signed by financial officers in the organization.
timely compliance with section 404 is a challenge for most companies, even those with large in-house internal accounting departments. tight deadlines and internal audit staff limitations may prompt a company to outsource these functions.
integrity partners can help your organization in providing the expert resources in meeting this challenge. our professionals have a combined 75 years of accounting and financial experiences in risk assessment and management. our hands-on experience allows us to provide the initial and on-going requisite analysis, design, implementation, documentation, and testing that your company's enduring sox program will require in maintaining its year over year certification.
usa patriot act/anti-money laundering compliance
in response to the terrorist attacks on the united states, the usa patriot act was signed into law in october 2001. among other things, the patriot act is intended to strengthen u.s. measures to prevent, detect, and prosecute international money laundering and the financing of terrorism. these efforts include new anti-money laundering (aml) tools that impact the banking, financial, and investment communities.
the u.s. department of treasury requires an aml program to be in writing and must include the following:
under the patriot act, certain persons in the securities and banking industries, such as registered dealers and brokers, and operators of credit cards and money services, are subject to new requirements for establishing aml programs, reporting suspicious activity, verifying the identity of customers, and dealing with certain types of accounts involving foreign persons.
integrity partners can help banking employees, brokers and dealers of securities, and others who are subject to the aml regulations in complying with the intricate regulations of the patriot act. we have an experienced team with the knowledge and capabilities to assess your current aml policies, and if necessary, help design and implement a program that entails the necessary tools and software for illegal activity detection and reporting policies. most importantly, integrity partners will train your organization in adopting these policies.
foreign corrupt practices act
u.s. firms seeking to do business in foreign markets must comply with the foreign corrupt practices act (fcpa). in general, the fcpa prohibits american companies from making illegal payments to foreign officials for the purpose of obtaining or keeping business. the chief enforcement agency of the fcpa is the department of justice, with a coordinating role played by the securities and exchange commission (sec). the office of general counsel of the department of commerce also answers general questions of u.s. exporters concerning the fcpa's basic requirements and constraints.
in the mid 1970's, investigations by the sec revealed that over 400 u.s. companies admitted to making questionable or illegal payments in excess of $300 million to foreign government officials, politicians, and political parties in order to secure some type of favorable action by a foreign government. congress enacted the fcpa to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the american business system. the antibribery provisions of the fcpa make it unlawful for a u.s. person to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person.
the fcpa also requires that publicly-held u.s. companies and foreign companies which list on the u.s. stock markets to maintain accurate accounting records in a certain manner so that bribes may not be concealed and the true nature of a company's transactions is accurately reflected. additionally, the provisions of the fcpa require these companies to design an adequate system of internal accounting controls.
violations of fcpa have severe consequences such as steep government fines and large legal fees. more importantly, loss of investor confidence, questionable integrity of management, and poor publicity are long term negative consequences of a fcpa conviction.
whether your company is currently embroiled in a fcpa issue or is in need of an international compliance program to prevent fcpa violations, integrity partners professional have the experience and backgrounds to help. we have handled these types of sensitive investigations and have assisted in bringing successful resolution to certain issues. additionally, integrity partners has a top-notch network of domestic and international affiliates to help your entity implement a global company policy for the compliance of fcpa.
• the development of internal policies, procedures, and controls;