What's Ahead For 2014 In Fraud And Corruption
They may not be as fashionable as the color oxblood or fur vests, but Ernst & Young (EY) has compiled the top trends for 2014 in fraud and corruption. Shareholders expect growth. Regulators challenge corporate compliance. Companies try to mitigate risk. It's a melee of competing ideals and EY breaks down the following themes for focus over the new year. Auld lang syne indeed.
Cybercrime: "Dealing with reputational harm and the business risk associated with cybercrime will become part of a general counsel's responsibility set," according to EY. Even though traditionally this work has fallen within the scope of the chief information officer's work, the immediate responses and potential shareholder impact make it fall within the general counsel's workload.
Africa: A continent with a rapidly growing economy and sophisticated consumer markets makes it enticing to investors, but there's also the perception of corruption. EY found 83 percent of African respondents viewed bribery and corrupt practice as widespread in their regions. EY suggests significant due diligence to mitigate the risks of setting up shop.
Regulatory Pressure: It won't be going anywhere in 2014, EY predicts. "Notwithstanding the billions of dollars in restitution, fines and litigation costs incurred to date by banks and securities firms, regulatory pressure is not expected to dissipate in 2014," according to the release. Expect focus to shift from large institutions down to midsize banks.
Big Data: What was once used for marketing and sales may be making its way over to the internal audit, compliance and corporate oversight departments. Forensics analytics are beginning to help companies monitor business data, and developments and techniques in this field are expected throughout the new year.•