Latest update April 19th, 2024 12:59 AM
Oct 28, 2010 News
Internal auditors of public and private sector agencies are meeting in Georgetown to confront risks to their entities, including IT fraud.
More and more companies in Guyana are moving to computerise their operations but management of these companies need to understand the risks involved, said Oswald Barnes, Director of Internal Audit at the Secretariat of the Caribbean Community.
Barnes sits on the board of the Institute of Internal Auditors (IIA) which has pulled together internal auditors for a two day workshop to address IT fraud, risks and controls.
“People tend to think of risk management as a fancy concept or something for large enterprises; that’s definitely a misconception,” said Jose Marin, who has travelled across Latin America dealing with the issue. He has been invited by the IIA to be one of the facilitators of the workshop.
“This is something (companies) have to deal with; you have no option. Even if you are a small enterprise or a large enterprise there are some measures you have to take to ensure that the aspects of risk are being dealt,” added Marin.
Barnes said that the concept of risk management is relatively new in Guyana, given that not many companies have risk management committees.
According to John Seeram, president of the IIA, recent statistics have revealed that nearly one-third of business failures are attributed to internal fraud, while organisations are losing as much as seven percent of their income as a result of this problem, with approximately 85 percent of the worst frauds being perpetuated by employees.
“Preventing, detecting, investigating and taking corrective action on fraud is essential to the health and integrity of organisations and the wider community,” he stated.
According to the IIA, today directors can be, and are the first ones to be held liable for the failures of their local and overseas companies. The demise of Enron and Arthur Anderson, corporate bankruptcies, Clico and other scandals, have led to resounding response from regulatory bodies, governments, and even the man in the street, Seeram said.
He added that attention is now being focused on those responsible for corporate governance with directors, executive management and auditors being viewed differently by the public, the shareholders, employees, and the courts.
“All employees, right down to the office attendant or janitor as they are known, have a professional and moral obligation to be on the lookout for fraudulent and corrupt activities in an entity,” he added.
Seeram said that this obligation is of particular significance to those staff in accounting and related areas who perform the day-to-day task of initiating transactions, having them approved, posting to appropriate accounts, and producing reports of such transactions to the relevant authorities.
Hence, it is imperative that staff in their organizations have a basic understanding of fraud and be well aware of red flags and participate in the control and design of fraud control activities and monitoring activities, he said.
Regarding IT fraud, participants in the workshop will be provided with tools and/or guidance to perform this assessment.
“It will take into consideration the rising incidence of IT fraud and to go with this, the risk exposures to organizations, and the need for these skills which cannot but be over-emphasised,” Seeram stated.
Where is the BETTER MANAGEMENT/RENEGOTIATION OF THE OIL CONTRACTS you promised Jagdeo?
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