Code of Ethics Hinder Fraud
 Having a well-written code of ethics is a powerful fraud deterrent. A code of ethics provides directions when resolving ethical dilemmas, especially those that are particularly ambiguous.
The Legal Dictionary gives a broad description of the link between legal and ethical and highlights the importance of codes of ethics. It says that the response of many professions to the challenging and demanding problem of institutionalizing business ethics is to implement codes of ethics, develop statements of corporate goals, sponsor training and educational programs in ethics, install internal judiciary bodies that hear cases of improprieties, and create telephone hot lines through which employees can anonymously report possible ethical violations. It further states that a code of ethics provides members of a profession with standards of behavior and principles to be observed regarding their moral and professional obligations toward one another, their clients, and society in general.
Many organizations have gone out of their way to have elaborate codes of ethics; however, in many cases the wording leaves space for further misunderstandings, which could prevent a corporation from prosecuting employees who commit fraud. When reading about core values of organizations, almost all of them include words such as ethics and legal. The question remains, is that enough?
Preventing corporate crime entails actions more than just words. The business world has plenty of pressures and opportunities, which can challenge the actions of almost anyone, including those with high values and principles
The following sections of two different Codes of Business Conduct and Ethics portray similar goals and emphasize the same values. Prosecuting a perpetrator of corporate crimes would be easier when the definition of fraud is clearly stated within the code of ethics.
“The Company is proud of the values with which it conducts business. It has and will continue to uphold the highest levels of business ethics and personal integrity in all types of transactions and interactions.
To this end, this Code of Business Conduct and Ethics serves to
(1) emphasize the Company’s commitment to ethics and compliance with
the law;
(2) set forth basic standards of ethical and legal behavior;
(3) provide reporting mechanisms for known or suspected ethical or
legal violations; and
Agreeing that an important part of every code of business is spelling out what fraud is and the punishment of behaviors, contrary to what was stated in a corporate policy, is not a question. Overlooking steps is risky because to be effective, a code of ethics and business standards must be not only be implemented and developed, but also all stakeholders such as management, employees, vendors, and contractors must acknowledge its terms. Corporations should ensure ongoing training and monitoring of compliance with core values aligned with the corporation’s strategic plan.
“Fraudulent Conduct in County Services"
The County is committed to protect against all improprieties in public programs and services. Integrity in the administration of County programs and services must exist to ensure the public's trust. It is critical that the County take whatever action is necessary to prevent and deter fraud and abuse which demonstrates commitment to protecting the public interest in essential public programs and services.
There shall be "zero tolerance" for fraud committed by County employees or contractors in the administration of County programs and provisions of County services. Fraud is the intentional: (1) perversion of truth for the purpose of inducing another in reliance upon the falsehood to part with something valuable or to surrender a legal right; or (2) false representation of a matter of fact, whether by word or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that the person shall act upon it to his/her injury.
(Reference: Board of Supervisors Policy No. A-120)”
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TRAINING OPPORTUNITIES
Tampa Bay Chapter
Dinner Meeting February 9, 2010-
Ethics
- Behavior (Un)becoming of a Department Manager
- Steve Hooper
Dinner Meeting March 9, 2010-
Crime Stoppers of Tampa Bay -
Debbie Carter
Dinner Meeting April 20, 2010-
Arson Fraud - Lt. Eric Saccasyn
11th Annual Fraud & Computer Crimes Seminar
May
11-12, 2010
Ruth Eckerd Hall
Clearwater, Florida
1111 McMullen Booth Road
Clearwater, FL 33759
Association of
Certified Fraud Examiners
Professional Interviewing Skills
Tampa, FL
February 25-26, 2010
2009 - 2010
OFFICERS & DIRECTORS
PRESIDENT
Steve Hooper, CIA, CFE, CCSA, CGAP
Clerk of the Circuit Court Hillsborough County, FL
(813) 276-2029 x3703
VICE
PRESIDENT
Christine Dever, CPA/CFF, CFE
City of Tampa
(813) 274-7166
SECRETARY
Ellen Wilcox, CFE
Florida Department of Law Enforcement
(727) 298-2482
TREASURER
Laura Krueger Brock, CPA/CFF, CFE, CVA
Kirkland, Russ, Murphy & Tapp, P.A.
(727) 572-1400
DIRECTOR
Mark Dubina, CFE
Tampa Port Authority
(813) 241-1893
DIRECTOR
Sharon M. Shaw, CFE
OAG Statewide Prosecution
Tel: (813) 287-7960
DIRECTOR
Debbie Venanzio, CFE
Branch Banking & Trust Co.
Tel: (727) 302-5498
DIRECTOR
Bill Miles, CFE
Florida Department of Law Enforcement
Tel: (863) 701-1474
DIRECTOR
Gary Chapman, CIA, CGAP, CFE
City of Tampa
Tel: (813) 274-7163
CHAPTER TRAINING
Wayne Boytim, CFE
Retired
(813) 274-7167 |
Understanding corporate crime is a need that was emphasized by Steven Box when
he stated: “Crimes of the powerful can only be ignored at the risk of enormously increasing our chances of being victimized by them.” The ultimate goal of every corporation is generating profit for its stakeholders. Profit motives may be prevented by market conditions such as competition, labor regulations, consumers, and government. The challenge for management is when their performance is linked to achieving these goals without undermining ethical principal.
According to the book Crime and Criminology,
five environmental uncertainties may create problems for
corporations in the following ways:
1.
Competitors: Technological
breakthroughs; price structure; marketing techniques; merges,
new or expanding markets.
2.
Governments: Extending
regulations to cover more corporate activities either through
new laws or tougher enforcement of existing laws.
3.
Employees: Any collusive
activity, but especially those joining trade unions pursuing
“militant” wage settlements and making “radical” demands on
altering conditions of work/employment.
4.
Consumers: Especially when
demand for product is elastic and consequently fickle, or when
“consumerism” is prevalent and making highly visible and dubious
corporate practices.
5.
Public: Especially through
growing “environmentalist” sensitivity to conserving fresh air,
clean countryside, and natural resources.
Typologies of crime regularly describe the
rationalization factor behind certain corporate crimes. The
combination of risk factors, a profit driven performance
assessment, and tight opportunities may lead to fraud and
corporate crimes.
The "silent saboteurs"
Saboteur is a person who commits or
practices sabotage. The Online Ethics Center for Engineering and
Research quotes silent saboteurs used by Frank Navran as
follows:
1.
Scapegoating: Blaming others
for missed commitments, bad decisions or poor results.
2.
Allowing the boss to fail by
withholding information and not pointing out risks.
3.
Budget games: Padding the
budget in anticipation of cuts, end-of-year spending sprees to
match estimates to actuals.
4.
Over promising to win a
customer, gain support for a pet project or avoid a
confrontation.
5.
Turf guarding: Protecting
yourself from losing control or power.
6.
Endless meetings and memos
to make sure that you are covered or that you can distance
yourself from a bad decision.
7.
Under delivering on
commitments because the other person's priorities are not
important to you or because you look good by looking better than
someone else.
8.
Risk aversion: Not doing
what is needed to succeed because you fear the consequences of
failure more than you value the reward of success.
9.
Sharp penciling: Fudging on
reported results because everyone else does it so you have to do
it to stay competitive for pay and promotions.
When Mr. Larry D. Thompson gave a speech
about corporate scandals, he stated: “companies develop their
own methods that guide employees' thoughts and actions. That
culture is a web of attitudes and practices that tends to
replicate and perpetuate itself beyond the tenure of any
individual manager. That culture may instill respect for the law
or breed contempt and malfeasance. The organization itself must
be held accountable for the culture and the conduct it
promotes.”
In conclusion, when fraud examiners are working due diligence
engagements or investigating corporate fraud, a simple step is
to start by reviewing the code of ethics or standards of business
practices. I may pave a roadmap to a successful engagement and
helpful suggestions for corporate governance improvement.
Author:
Consuelo Herrera, CAMS, CFE, FCPA
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Chapter News
Consuelo Herrera of Forensic Accounting & Fraud Solutions
International, LLC, a consulting and investigative firm
announces a joint venture with Adam Bratter, C.P.A., P. A.
This Joint Venture will provide consulting services to
financial institutions, businesses and organizations seeking to
prevent fraud and to attorneys, Certified Public Accountants,
and investigators who need help with fraud and white-collar
crime investigations. In addition, this joint venture offers
services both in English and Spanish to investors and
investigators handling matters in Spain and Latin America. FAFSI
develops customized training programs suitable to clients’
specific needs.
CFE Exam Prep
Study Group
Our CFE Exam Prep Study Group is going
strong with participants attending the weekly three-hour
session. The Group meets every Tuesday (except on dinner meeting
nights) at 6pm at the Fifth Third Bank on Kennedy Blvd, which is
close to the Westshore Blvd intersection. The Group is
facilitated by two distinguished CFE members, Pamela Ranney and
Consuelo Herrera who volunteer their time each week. If you are
interested in joining us, contact me at
hooper@hillsclerk.com
or at the chapter email address
tampacfe@tampabaycfe.org.
The session are open to anyone,
member or not, who are interested in pursuing the CFE
designation. We systematically cover all four-parts of the exam,
through presentations, discussion, and reviews of exam questions
and answers.
Summary of the January 12 Dinner Meeting
During our last dinner meeting
Detective Michael Bell from the Identity Theft Strike Force of
the Polk County Sheriff's Office, gave a presentation about
Identity Theft and the work undertaken by the Identity Theft
Strike Force.
The Strike force has one sergeant,
eight detectives and two analysts working cases referred to
them. Cases that they handle include Identity Theft, Check
& Credit Card Fraud, Schemes to Defraud, Counterfeit Drivers
Licenses, Embezzlement, Mortgage Fraud and Contractor Fraud.
During an average month the team handles
around thirty cases but this can increase to around fifty cases
during busy seasons. Detective Bell reported that cars at
gyms and parks are often targeted by thieves looking for credit
and debit cards that can be used to make fraudulent purchases.
He stated that around every four months there is a spate of
these break-ins at various gyms and parks in the area.
Thieves are often difficult to catch due
to poor images being captured by surveillance equipment.
The cameras often do not capture the thieves face only the top
of their head, or the image is unclear as there is too much
light making it very difficult to make a positive ID.
Businesses could do more to assist in the capture of these
offenders by installing cameras that capture clearer
images of those as entering the establishment, and ensuring
there are no obstructions to prevent a clear image from being
captured.
Detective Bell also explained why some cases
are so difficult to solve. He stated that in addition
to poor surveillance images, a lack of paper trail created
by modern business practices makes it difficult to pin down
who actually did what. Not all checks are returned to
the originating bank, and electronic transactions are
becoming more popular. We can all assist in
the fight against identity theft through education. If we
are to reduce the occurrence of this criminal activity, we
must make people more aware of the far reaching consequences
of identity theft. |
Dinner Meeting Information
 Our
next Dinner Meeting is scheduled for February 9, 2010
Steve Hooper,
CIA, CGAP, CCSA, CFE, Senior Internal Auditor, County Audit
Department Clerk of the Circuit Court - Hillsborough County, FL
will be presenting Ethical Dilemma – Behavior (Un)Becoming of a
Department Manager. Steve will walk through this case
study and provide background information into the allegations,
and the investigative conclusion, of unethical behavior of a
County manager. The case focuses on the manager’s role as the
treasuer of a volunteer fire department association.
Steve Hooper
is a Certified Internal Auditor (CIA) currently serving as a
Senior Internal Auditor with the Hillsborough County Clerk of
the Circuit Court in Tampa, Florida. His specialties include
compliance, cash controls, financially related, and operational
audits.
Steve is also
a Certified Fraud Examiner (CFE) and is President of the Tampa
Bay chapter of the Association of Certified Fraud Examiners. He
is a member of the The Institute of Internal Auditors and it’s
Florida West Coast chapter.
In addition
to his CIA, Steve is a Certified Government Auditing
Professional (CGAP) and has earned The Institute’s Certification
in Control Self-Assessment (CCSA) and the Accreditation in
Internal Quality Assessment/Validation.
Prior to his
present position, Steve has held various responsibilities within
the Clerk’s function. He has developed training curriculums for
the Clerk and conducted training sessions for all levels of
employees. He has presented at many seminars and conferences.
Steve has conducted many IIA global on-site training sessions.
Steve is a
retired military veteran having served a distinguished twenty
year career with the United States Air Force.
He earned his
Bachelor’s degree in Business Administration from Saint Leo
University.
The dinner meetings will be held at The
Ramada Tampa Westshore Inn & Conference Center, 1200 N. Westshore Blvd. Registration and social begin at 6:00 PM, followed by
the buffet
dinner at 6:30, and presentation at 7:00.
To make your reservation, please complete the
registration form
here. You can also make your reservation by
emailing
Gary Chapman by 1:00 PM the Friday before the meeting date.
Reservations will not be accepted after 1:00 PM on Friday. Walk-ups are always
welcome, but will only be accommodated if space is available.
"No Show" Policy
The subject of “no shows” (that is making a reservation but failing
to attend) at dinner meetings has been discussed previously in CFE
NEWS. On the Friday prior to the meeting, we make our best guess as
to the number attending. With that said, the Board implemented the
following policy:
"No Show" is defined as not attending a meeting after making a
reservation and not canceling the reservation by noon on the day of the
dinner meeting. The first "no show" will be considered as a “grace” miss
and will not be billed. Upon a subsequent "no show" the Chapter will
bill $32.00 (actual cost to the Chapter) for both missed meetings and for any meetings missed after that.
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News from the ACFE
ACFE "Professional
Interviewing Skills" seminar coming to Tampa Bay in 2010
Professional Interviewing Skills
seminar on February 25-26, 2010 at the Doubletree Guest Suites
in Tampa.
This two-day, interactive course
will teach you how to be more effective in asking direct and
follow-up questions, while evaluating both verbal and non-verbal
responses, so you can be a better listener and observer during
subject interviews.
For more information about the seminar and
how to register click
here.
ACFE Awards - Nomination Period to Open Soon
The nomination period for the ACFE Awards opens in February
and ACFE members are encouraged to nominate their fellow members
for the following awards:
CFE of the Year
Educator of the
Year
Outstanding
Achievement in Outreach/Community Service
Chapter of the Year
Chapter Newsletter
of the Year
We will send out an official notice to all members when the
nomination period opens.
New! 2010 CFE
Exam Prep Course, U.S. Edition
Associate members get certified in 2010 with the new 2010
CFE Exam Prep Course. Featuring the updated Fraud Prevention
and Deterrence section (formerly Criminology and Ethics),
the 2010 CFE Exam Prep Course is the most comprehensive
study tool available to prepare you for the CFE Exam.
Purchase the CFE Exam Prep Course at the ACFE Bookstore and
start working toward your CFE credential today.
Blair, Cooper, and Ford Elected
to ACFE Board of Regents
Lt.
Col. Robert J. Blair, CFE, CGFM; Cynthia Cooper, CFE, CISA;
and Joseph L. Ford, CFE have been elected to the ACFE Board
of Regents. Members chose them from a list of nine
candidates.
The
three new Regents, who hold two-year terms, will take office
at the Board's February meeting at the ACFE headquarters in
Austin, Texas. They replace retiring members Peter R.
Callaway, CFE, CAMS; Bert F. Lacativo, CFE, CPA; and Delena
D. Spann, CFE, CCA. |
More News & Training
DIY Cybercrime Kits Power Growth in
Phishing Attacks
Do-it-yourself
cybercrime kits are driving a surge in Internet-borne computer
infections.
DIY
kits have been a staple in the cyberunderground for some time.
But now they've dropped in price and become more user-friendly.
WASHINGTON
— On a Monday morning earlier this
month, top Pentagon leaders gathered to
simulate how they would respond to a
sophisticated cyberattack aimed at
paralyzing the nation’s power grids, its
communications systems or its financial
networks. The results were
dispiriting. The enemy had all the
advantages: stealth, anonymity and
unpredictability.
'Fatal
System Error' has insight on cybercrime
"Fatal System Error," the
new book by Financial Times' cyber-security
reporter Joseph Menn, sheds light on the $1
trillion cybercrime industry that festers
beneath the Internet.
The book tells the tale of Barrett Lyon, a young
computer whiz from California, and Andrew
Crocker, a United Kingdom high-tech crime
detective, as they dig into the workings of
international criminal rings. It's also a sober
account of a menace that threatens consumers'
identities, corporations' assets, national
defense secrets and the stability of the
Internet itself.
Read more:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/01/23/BU5T1BMD2T.DTL#ixzz0eQQLJfLX
"Fatal System Error," the
new book by Financial Times' cyber-security
reporter Joseph Menn, sheds light on the $1
trillion cybercrime industry that festers
beneath the Internet.
The book tells the tale of Barrett Lyon, a young
computer whiz from California, and Andrew
Crocker, a United Kingdom high-tech crime
detective, as they dig into the workings of
international criminal rings. It's also a sober
account of a menace that threatens consumers'
identities, corporations' assets, national
defense secrets and the stability of the
Internet itself.
Read more:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/01/23/BU5T1BMD2T.DTL#ixzz0eQQLJfLX
"Fatal System
Error," the new book by Financial Times' cyber-security reporter
Joseph Menn, sheds light on the $1 trillion cybercrime industry
that festers beneth the Internet
The latest edition has a great selection of articles pertaining
to White Collar Crime.
Tampa Bay IMA
Next meeting
February 11, 2010 - Identity Fraud Emerging: Issues for
Individuals & Companies
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President's Message
Thanks to all who attended our January dinner meeting on January
12th. I was assured by the hotel staff that the reason the heat
was off was not due to nonpayment of the electric bill. We
endured the cooler temperature and were rewarded with an
entertaining presentation on Identity Theft by Mike Bell, Polk
County Sheriff’s Office.
I would
like to mention that I was not a founding member of this
Chapter. But I have been an active member since 1997. I have
seen the Chapter grow from a small handful of members attending
dinner meetings, to a fairly large Chapter enjoying increased
membership and attendance at our meetings. Fifty-nine members
and guests were in attendance at our last dinner meeting. That
in itself is good news. However, the chapter has done one
better. We have now set an all time record of 184 members.
Congratulations to our CFEs and Associates who has made this
possible through their efforts. Thanks for getting the word
out about our profession and inviting guests to come see for
themselves what the Association, the Chapter, and the CFE
designation has to offer.
These
two events, the membership and the attendance, lead me to
believe that we are getting the message out to our community as
a professional group. Conrad Hilton, the Founder of Hilton
Hotels once said “Success seems to be connected with action.
Successful people keep moving. They make mistakes but they don’t
quit.” To me, this sums up our Chapter today. As a Chapter, we
are active as I noted in my last month’s message. We are a
Chapter that keeps moving forward, to be better each day, each
month, each year, and on into the future. As our membership
grows, we are cultivating future leaders that will continue the
vision of our founding members “to serve the community by the
promotion of improved fraud detection and deterrence and through
expansion of knowledge and the interaction of its Members.” I
encourage all members to look around your business, company, or
government and identify someone you think could benefit from
being a member of our Chapter. Just think if each member
recruits only one new member, our membership would reach 368
strong.
I would
like to acknowledge our members who brought guest(s) to our last
dinner meeting:
·
Jennifer Larson
brought guests Gerald Cannon and Dale Simpson, from Wellcare
Health Plans
Kristen Snogniew
brought guests Julie Cooke, Jennifer Farber, and Karen Stine
from Snogniew & Associates
Kate Barker
brought guest Lindsey Copeland from USF – St. Petersburg
Rodney Pitzer
brought guest Joshua Pitzer from the United States Army
Debbie Cook
brought guest Terry Treadwell from Terry Treadwell, CPA
Jingming Ma
brought guest Nicholas Williams from University of Tampa
I brought as Chapter guest, Melinda Jenzarli and Boriana Pollard
from City of St. Petersburg
I would
also like to identify the first time attendees (other than guest
of members):
·
Perry Johnson, no
business affiliation noted
·
Jennifer Larson,
Wellcare Health Plans
·
Heather Mattiza, Florida
Atlantic University
·
Dawn Rawley, University
of South Florida
·
Kristen Snogniew,
Snogniew & Associates
On behalf of the chapter, I would
like to thank the guest and first time attendees for visiting
with us. We hope to see you again at one of our Chapter
sponsored events.
Speaking of the next dinner meeting,
it will be my pleasure to be your presenter for the evening. I
have put together a small case study of a county manager,
performing in a volunteer role for a community association, who
obtained fraudulent reimbursements from her county employer. I
am sure you will be entertained with some of the simplistic
control weaknesses that allowed this scheme to work. Remember,
the meeting is February 9th beginning with
registration at 6pm. Hope to see you there!
I have had some additional inquiry
as to our CFE study group. I want to stress this important
program. It is there for anyone - member or not, to study for
the distinguish Certified Fraud Examiner designation. We have
posted information in the newsletter as to the meeting times,
dates, and location. If you would like to become part of this
dynamic group, let me know and I will get you in touch with the
group.
In closing, I would like to
reiterate the call to keep this chapter moving forward. Recruit
a new member and be a volunteer. If you have some time to spend
getting involved such as mentoring students or assisting with
our study group (and more) let me know. The words of an old
Chinese proverb fit quite nicely here:”Do not fear going forward
slowly; fear only to stand still.”
Steve Hooper, CFE, CIA, CGAP, CCSA
President, Tampa Bay Chapter - ACFE |
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