Fraud Management And Conflict Of Interest

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Information about Fraud Management And Conflict Of Interest
Business & Mgmt

Published on January 9, 2009

Author: cfeicg

Source: slideshare.net

Description

An introduction to occupational fraud, including the relevance of conflicts of interest.

These slides were used to accompany a presentation at the Singapore Exchange (SGX) on 13th November 2008 by Mr. Tommy Seah, who shared his insights and experiences in fraud risk management from his many years of being a Certified Fraud Examiner (CFE).

1 Presents Fraud Management and Conflict of Interest By Tommy Seah

Fraud Management and Conflict of Interest presented by Tommy Seah FCPA, FAIA, CFE, CSI ACFE Vice Chairman (2006/07) Regent Emeritus ACFE Board of Regents (ACFE World Headquarters, Texas) Chairperson, CFE International Consulting Group z

3 • What is Occupational Fraud • Who commits fraud ? • What is conflict of interest? • Does it matter? • Conflict of interest and Board members • What is fraud management ?

www.cfe-in-practice.net

5

www.cfe-in-practice.net This Triangle helps explain the human process for committing any kind of wrong Opportunity Motivation Rationalization

www.cfe-in-practice.org What type of individual commits FRAUD? It is not limited to any one type of person.

• Married • Active religious members • Children • Good education • First-time offenders • Good employees • Don’t abuse alcohol

• Optimistic • High self-esteem • Achieving • Family harmony • Socially conforming • Self control • Kind • Sympathetic Conclusion: Fraud Perpetrators Look Exactly Like Us! z

Normal Citizens Fraud Perpetrators Bank Robbers Sample Sample Sample No Significant Differences Major Differences While people who commit rape, murder, bank robbery and other property offenses have distinguishing characteristics, fraud perpetrators look more like more citizens than criminals! z

www.cfe-in-practice.org The Reality of Fraud Sometimes, even an honest person will lie. There are different motivations for lying. It is important for the interviewer to be able to recognize the different types of liars and to understand the reasons they lie. z

Managing Conflict of Interest is an integral part Fraud Management z

13 Black’s Law Dictionary defines a “conflict of interest” as: “a real or seeming incompatibility between a person’s private interests and his or her public or fiduciary duties.” z

14 • Conflict of interest is a set of conditions in which professional judgement concerning a primary interest (such as patients' welfare or the validity of research) tends to be unduly influenced by a secondary interest (such as financial gain). • Thompson DF. Understanding financial conflicts of interest. N Engl J Med 1993; 329: 573-576 z

15 • Not everyone think that Conflict of Interest is bad. • Conflict of interest is a condition not a behaviour. • This argument is becoming steadily less tenable as evidence accumulates on the influence of conflict of interest. z

16 Procurement Fraud/Abuse Many contract procurement fraud schemes… • From the simple: – Bribes & Kickbacks (e.g. Coalition Provisional Authority, House Intel & Appropriations Committee) • To the slightly more sophisticated – Bidder collusion w/ government employee – Bidder collusion w/ other bidders • Courtesy bids, price fixing PhaseII:Procurement z

17 • Conflict of interest, revolving door – Boeing & US Air Force – Boeing has agreed to pay a total of $615 million dollars to resolve the government’s investigations and claims relating to the company’s hiring of the former Principal Deputy Assistant Secretary of the Air Force for Acquisition and Management, Darleen A. Druyun, by its then Chief Financial Officer, Michael Sears, and its handling of competitors information in connection with the Evolved Expendable Launch Vehicle (EELV) Program and certain NASA launch services contracts PhaseII:Procurement z

18 Do you have a conflict of interest? Integritas ac virtus bonorum sunt hominum arma z

19Copyright (c)2006 www.cfe-in-practice.net 19 Questions? Integrity and Virtue are the weapons of good men z

20Copyright (c)2006 www.cfe-in-practice.net Thank you Contact Information: Tommy Seah CFE, FCPA, CSI Regent Emeritus ACFE Board of Regents, Texas, USA www.cfe-in-practice.net tommy@cfe-in-practice.net Phone : + (65) 91069872 z

21 Website: Email: http://www.cfe-in-practice.org enquiry@icfe-cg.com

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