A collaborative anti-fraud effort, launched a year ago by four organizations representing key members of the financial reporting 'supply chain,' has released the first in a set of 'tools' and programs designed to improve the deterrence and detection of financial reporting fraud.
The organizations taking part in this anti-fraud effort, as noted in this press release
issued earlier today, include the Center for Audit Quality (CAQ
), Financial Executives International (FEI
), the Institute of Internal Auditors (IIA
), and the National Association of Corporate Directors (NACD
). The groups formed a partnership a year ago to collaborate on projects to advance efforts to deter and detect financial reporting fraud.
At a press conference earlier today,representatives of the four organizations
announced the release of the first 'tool' in which input was gathered from the collective partnership: FEI's Fraud Literacy Quiz
, and a related article which appears in the November issue of Financial Executive magazine, Financial Reporting Fraud: Prevention Starts At The Top.
(CPE credit is available for those who read the magazine article, register in FEI's CPE center, and respond to the CPE questions).
Speaking on the panel at the press conference were Marie N. Hollein
, President and CEO of FEI, Cindy Fornelli
, Executive Director of CAQ, Michelle J. Hooper
, CAQ Board Member, NACD Board Member, and President & CEO of The Directors Council, Peter C. Clapman
, NACD Board Member and former SVP and Chief Investment Officer of TIAA-CREF, and Hal Garyn
, VP of North America Services, the IIA.
(Pictured above, L-R, Peter C. Clapman, NACD, Hal Garyn, IIA, Marie Hollein, FEI, Cindy Fornelli, CAQ, Michelle Hooper, CAQ)
Here are some brief highlights from the press conference (we will post links to other press coverage in a subsequent comment to this post):
Cindy Fornelli, CAQ: "Just over a year ago, CAQ published a report, to bring together the whole host of stakeholders.. including representatives at this table (CAQ, FEI, IIA, NACD) in the financial reporting supply chain... [as well as applicable to] a host of other individuals... to parter together to deter and detect financial reporting fraud... We are thrilled... to unveil our first collaborative effort... collectively we [the 4 organizations] have almost 500,000 individual members." Fornelli emphasized the key aspect being not only the number of individuals, but the fact that the four organizations were collaborating, talking about these issues together. She noted that among the major themes in the CAQ report issued last year, were the need to emphasize tone at the top, involve all parties in the process, and the importance of communication among the (financial reporting) 'supply chain' participants.
Michelle Hooper of CAQ: "This is the first time in our groups' history to bring these four groups (CAQ, FEI, IIA, NACD) together." She added it is a "step in the right direction, in terms of our groups meeting jointly" on the subject of the deterrence and detection of financial reporting fraud. Hooper noted the collaboration has focused on a number of projects, some under development/in the pipeline, to: "increase stakeholder awareness, elevate the understanding of the responsibility (for deterring and detecting financial reporting fraud), and improving individuals' awareness and understanding" in this area. She noted the goal of the collaboration a year ago, as noted in the CAQ's report issued at that time, was 'a platform for action,' and the release of the FEI Fraud Literacy Quiz and related magazine article was a result of this shared platform.
Fornelli gave an overview of some projects 'in the pipeline,' including development of publications providing education/analysis of some 'fraud scenarios,' and programs relating to the importance of professional skepticism, as well as relating to the 'expectation gap.'
Hollein noted the Fraud Literacy Quiz, created under consultation with the collaboration, followed on FEI's Financial Literacy Quiz, issued previously. She added that while the quiz can help someone assess their knowledge, the most important part of the quiz was as a tool to encourage further learning and skill development.
Hooper invited members of the press to take the quiz, at one of the computers located in the FEI booth at the FEI CFRI conference (where this press conference was held), to try it first hand. She noted that the quiz itself was a learning experience as information was provided automatically by the online quiz instrument, in response to incorrect answers.
Hal Garyn of the IIA emphasized the IIA looks forward to the continued collaboration, and Peter Clapman of the NACD noted upcoming educational programs slated for the collaboration include webinars as educational tools. Clapman added, "It is incombent upon the board of directors as a whole, and certainly audit committee members, to fulfill their responsibilities... this educational process (sponsored by the collaboration) is important."
One of the handiest takeaways of the day, was an observation by CAQ's Fornelli, in response to a question about the themes of the CAQ report issued last year, including, predominantly, tone at the top. Fornelli noted that "The Importance of tone at the top... [is that] an ethical culture has to permeate (the entire organization, including) the 'mood at the middle,' and 'buzz at the bottom'."