In a recent Deloitte online poll of business professionals across various industries, 37.5 percent say they are at least as concerned and 18.2 percent say they are more concerned about their company becoming a target of securities litigation as they were two years ago. Fueling this fear may be the fact that 27.4 percent of respondents report losing headcount in the compliance and internal audit function over the past 18 months.
Despite the reported decrease in the number of compliance and internal audit personnel, 49.7 percent of respondents believe their compliance and business ethics programs are strong and an additional 36 percent say they are adequate.
"With reduced headcount levels within compliance and internal audit, many organizations won't realize that they are not implementing sufficient fraud prevention programs until it is too late," said Kerry Francis, leader of the Corporate Investigations practice for Deloitte Financial Advisory Services LLP. "Executives and boards need to take a close look at their controls to mitigate litigation risks, because what worked prior to the financial collapse may not be adequate today."
Surveyed about which activities would most benefit their organization to reduce corruption and fraud risks, respondents cited more fraud awareness training (32.4 percent); expansion of internal audit monitoring procedures (23.1 percent); more robust fraud risk assessment (18.3 percent); and more oversight from the board and audit committee (7.5 percent).
