Regardless of the size or the industry of a company, corruption and fraud are constant challenges. Each can cost companies significant sums, both financially and reputationally, damaging public confidence and devastating the bottom line. Corruption and fraud have been shown to lower employee morale as well.
Most importantly, it can put a company under the microscope when it comes to regulatory investigations and unwanted scrutiny from law enforcement.
Effective compliance processes that not only meet but exceed regulatory expectations should be a top priority for any company looking to avoid corruption and fraud issues. However, deciding on how to create, implement, test, and monitor these processes can be challenging, especially when a solid compliance program has not already been put into place.
Lextegrity’s Risk and Compliance Analytics Director, Mihnea Rotariu, discusses the primary four indicators of spend risk—including market-based risk, domain risk, policy and tool risk,
and statistical risk—in our most recent article with Ethisphere Magazine. He then dives into the many factors to consider when determining which parts of a company are most prone to these spending risks such as:
- Geographic Locations
- Business Entity Types
- High-Risk Company Segments
- Unethical Employee Actions
- Third-Party Behaviors
- Automatic Approvals
- Expense Policies
- Gifts
- Spend Anomalies
- Suspicious Patterns and Trends
- Completeness and Accuracy of Data
By understanding the areas vulnerable to corruption and fraud throughout your company, your compliance program can better position itself to not only stop these acts from happening but prevent them in the first place.
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About Lextegrity
Lextegrity provides innovative enterprise data analytics and automation technology for compliance and audit professionals at leading global companies. This first-of-its-kind software is created by former in-house compliance and audit professionals who have operationalized compliance and audit programs globally. Organizations use our software suite to prevent and detect risks related to fraud, corruption, sanctions, kickbacks, and conflicts of interest. Our software unifies compliance systems and manages risk across the spend lifecycle for an end-to-end view in real-time.
Lextegrity’s software has been before regulators globally on several occasions and was even cited by the SEC as a remediation factor in a client’s FCPA resolution. It has been chosen by several companies after the appointment of compliance monitors or after the start of an investigation and has been a factor in resolving those matters, including helping to secure a DOJ declination.
