As the various pressures increase on
businesses the integrity of financial reporting has never been more crucial.
With
companies and individuals desperate to achieve profit targets the potential for
abuse may prove to be too much of a temptation.
It is
important that systems are in place to prevent misreporting and in worse case
scenarios fraud and these systems should be reviewed and rigorously checked.
The fall
out from recent LIBOR fixing scandal illustrate how vulnerable institutions are
if their personnel choose or are allowed to camouflage the extent of their
exposure to unanticipated market movements.
Fraud is not confined to any one business
sector.Despite the increased presence of computer modelling to monitor risk
there is always the “human element” which has to be considered.
Nobody has
devised a fail-safe system which affords 100% comfort but in many instances a
closer objective scrutiny would have given sufficient warning to have averted a
train wreck.
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