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Managing Business RiskManaging the Business Risk of Fraud: A Practical Guide

Reactions to recent corporate scandals have led the public and stakeholders to expect organizations to take a "no fraud tolerance" attitude. Good governance principles demand that an organization's board of directors, or equivalent oversight body, ensure overall high ethical behavior in the organization, regardless of its status as public, private, government, or not-for-profit; its relative size; or its industry.

The board's role is critically important because historically most major frauds are perpetrated by senior management in collusion with other employees. Vigilant handling of fraud cases within an organization sends clear signals to the public, stakeholders, and regulators about the board and management's attitude toward fraud risks and about the organization's fraud risk tolerance.

Sponsored by the The Institute of Internal Auditors (IIA), The American Institute of Certified Public Accountants (AICPA) and The Association of Certified Fraud Examiners (ACFE), this guide provides comprehensive steps for businesses to assess, prevent, detect and take action against fraudulent behavior within their organizations. Download the guide here.


5 Fraud Tips Every Business Leader Should Act On

Fraud in the workplaceOrganizations around the world lose an estimated 5 percent of their annual revenues to fraud, according to the ACFE's 2014 Report to the Nations on Occupational Fraud and Abuse. A single instance of fraud can be devastating: the median loss per fraud case in the ACFE study was $145,000, and more than a fifth of the cases involved losses of at least $1 million. The good news? There are some basic steps your organization can take immediately to lessen your vulnerability to fraud.

step 1Be Proactive. Adopt a code of ethics for management and employees. Evaluate your internal controls for effectiveness and identify areas of the business that are vulnerable to fraud.

step 2Establish Hiring Procedures. When hiring staff, conduct thorough background investigations. Check educational, credit and employment history (as permitted by law), as well as references.

step 3Train Employees in Fraud Prevention. Do workers know the warning signs of fraud? Ensure that staff members know basic fraud prevention techniques.

step 4 Implement a Fraud Hotline. Fraud is still most likely to be detected by a tip. Providing an anonymous reporting system for your employees, contractors and clients will help uncover more fraud.

step 5Increase the Perception of Detection. Communicate regularly to staff about anti-fraud policies, ways to report suspicions of misconduct, and the potential consequences (including termination and prosecution) of fraudulent behavior.

Implementing these tips could help prevent your organization from becoming a statistic –so take action today.



UK Serious Fraud Office Report

The Serious Fraud Office Annual Report:
AKA Real Fraud across "The Pond"

McGovern & Greene LLP has several clients that have interests in other countries. At times, we are asked for information on fraud prosecutions globally. We offer the following report and excerpts from the United Kingdom's Serious Fraud Office (SFO) which may be of interest to our constituents.

The Serious Fraud Office of the United Kingdom recently released their latest annual report. There are multiple agencies within the United States that have similar charters, but the SFO is also responsible for enforcement of the UK's Anti Bribery Act, similar to our Foreign Corrupt Practices Act. It is interesting to read the charter and the types of crimes prosecuted as there are many similarities. Here is a short excerpt from the report that explains the office and their mission.

"The SFO is an independent non-ministerial Government department responsible for investigating and, where appropriate, prosecuting cases of serious or complex fraud, bribery and corruption. The department forms part of the criminal justice system with jurisdiction in England, Wales and Northern Ireland. It is headed by the Director, David Green CB QC, who acts under the superintendence of the Attorney General."

The SFO takes on a small number of large cases and these will include cases:

• Where the conduct under investigation undermines UK commercial/financial in general and the City of London in particular;
• Where the actual or potential sums involved are high;
• Where actual or potential harm is significant;
• Where there is a very significant public interest element; and,
• That represent new species of fraud.

Read the report.

You may be able to save more for retirement in 2015

Many retirement plan contribution limits increase slightly in 2015; thus, you may have opportunities to increase your retirement savings:

2015 Tax laws Other factors may affect how much you can contribute (or how much your employer can contribute on your behalf). For example, income-based limits may reduce or even eliminate your ability to take advantage of IRAs. For more information on how to make the most of your tax-advantaged retirement-saving opportunities in 2015, please contact us.





American Gaming Association

The American Gaming Association (AGA) released a first-of-its-kind study of the economic impact of the casino gaming industry in its totality. The Associated Press and CNBC have already reported on this groundbreaking new research.

GamingReleased as part of AGA's Get to Know Gaming campaign, Oxford Economics found that the U.S. gaming industry:

• Contributes $240 billion— nearly a quarter-trillion—to the U.S.economy, which is equivalent to the total state budgets of New York and Texas combined;

• Supports more than 1.7 million jobs—more than double Washington, D.C.'s total employment—and nearly $74 billion in income;

• Generates $38 billion in tax revenues to local, state and federal governments – enough to pay more than half-a-million teachers' salaries.

Oxford conducted an in-depth analysis on the economic impact, tax revenues and employment figures of commercial casinos, Native American casinos and gaming equipment manufacturers as well as our industry's significant ripple effect, which supports local businesses and communities.

View the full report.



The Association of Certified Fraud Examiners (ACFE) release their
2014 Report to the Nations on Occupational Fraud and Abuse

The Cost of Occupational Fraud

2014 ACFE ReportThere is considerable attention paid to determining the overall cost of fraud. Executives want to know how significant the risk of fraud is to their companies, anti-fraud professionals need to justify budgets and satisfy performance metrics and the media and general public are curious about just how much money white-collar criminals are taking us for.

This ACFE report is based on 1,483 cases of occupational fraud, as reported by the Certified Fraud Examiners (CFEs) who investigated them. The analysis of these cases provides valuable lessons about how fraud is committed, how it is detected and how organizations can reduce their vulnerability to this risk. Read the 2014 ACFE Report.


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