Surpassing the Standard: Strategies for Developing Nations

Many anti-fraud professionals are used to discussing fraud risks with their C-suite in terms of compliance, risk assessments and accounting best practices. But Peter Goss, managing director of Forensics SizweNtsalubaGobodo Audit, believes that approach needs to be updated, especially for those operating in developing countries. He encouraged attendees at the 27th Annual ACFE Global Fraud Conference to “lift their language” when discussing anti-fraud strategies with their executives.

“Start talking about what’s happening in the world in terms of fraud and corruption,” Goss said. He argued that board members need to be convinced that fraud risk is not a problem that exists in a silo and should be considered a piece of a much larger puzzle. In an increasingly technological world, fraud is crossing borders now more than ever, and in response, multinational regulatory groups are becoming more prevalent. With worldwide attention on fraud, it also opens up opportunities to set an organization apart through approaches to dealing with fraud.

“Teach that to the boardroom,” says Goss. “Ask them, ‘What would make you more profitable?’ Show them that the answer is that you’re recognized by your peers in Europe and the U.S. because you comply with the OECD [Organization for Economic Cooperation and Development].” Change in preventing fraud will only truly be achieved by setting a tone through executives and captains of industry, not merely adopting new regulations. The key to evolving your organization’s anti-fraud strategy is for you to look at things from a global business leader’s perspective.

Another weakness in the mindset of many anti-fraud professionals can be when they look at risks through the scope of compliance and local laws when they need to consider that local regulations might not be enough. Goss drew on his experience practicing fraud prevention in Africa, and also highlighted parts of South America, explaining that the local law often can be flawed. In many developing countries, laws or the regulatory system itself can be intrinsically corrupt, or not extensive enough, and fraud examiners need to focus on the bigger picture. “If you [tell executives to] ‘do it because the law says to,’ it’s the wrong motive.”

Goss acknowledged that anti-fraud professionals in developing countries face extra barriers to fraud being taken seriously. However, by changing the approach in presenting fraud risks to executives, and encouraging involvement in multinational regulatory organizations, the conversation may start to turn in the right direction.