Fraud, Corruption and Bribery - 17-01

Fraud, Corruption and Bribery - 17-01 -...

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For the prevention, detection and control of fraud in all its guises The battle against fraud, corruption and bribery In spite of copious new rules and guidance, are we that much closer to curbing corruption, bribery and fraud than we were ten years ago? And if not, why not? Nigel Iyer and Øyvind Kvalnes examine the moral dissonance we experience and how ordinary and respectable people take the first step into muddy waters. The key could lie in how we neutralise our own emotions. They examine the challenges of adopting a new moral responsibility, and how we can start committing to ethical behaviour because we want to and not just comply because we feel forced to do so. Are we turning our back on fraud and corruption? If so what are we turning away from? A battle far from won A few months ago, when commenting on the 10th anniversary of the war in Afghanistan, retired US General Stanley McChrystal said, “The US and NATO are only 50% of the way towards achieving their goals in Afghanistan.” He also issued a harsh indictment of his country’s campaign and Americans’ “frighteningly simplistic” view of the situation. [1] If we also take a ten-year perspective on the permanent “war against fraud and corruption”, starting with the landmark Enron scandal, which was revealed October 2001 and which also exposed one of the biggest audit failures in modern history, could we honestly say that we are half-way to achieving our goals? And given that human greed, corruption and fraud have been around for centuries, is our view that more rules and regulation will be the answer also “frighteningly simplistic”? Perhaps the first point to make is that no goals were ever set for this war (but were any set in Afghanistan either?) although most of us would like to believe the implicit aim was to eradicate fraud and corruption. Looking back over the last ten years, we have brought in, arguably, more legislation than ever before, starting with the Sarbanes-Oxley Act and followed by a whole plethora of new laws, local regulations and codes of conduct. If, as many people believe, the amount of observable fraud and corruption in the world has increased, in the past decade, we need to question whether our whole strategy of forcing people to comply with more and more is, in fact, counter-productive, leading to a culture of “blind box-ticking”. Even in countries where corruption is said to be “rife”, such as India, and new legislation is proposed and introduced constantly, it does not seem to make a difference and campaigners for reform have to resort to desperate measures such as hunger strikes. [2] In numerous seminars and training courses we ask our participants to estimate the annual cost of fraud and corruption, taking into account all potential impacts, including such as direct cost, loss of value, damage to reputation and culture. We ask them to express this in terms of the turnover of a company or in terms of gross domestic product of an economy.
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  • Spring '12
  • Ahmed
  • Ethics , moral dissonance

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