Heissner Managing Business Integrity

Prevent, Detect, and Investigate White-collar Crime and Corruption
2015
ISBN: 978-3-319-12721-7
Verlag: Springer International Publishing
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 198 Seiten, eBook

Reihe: Management for Professionals

This book deals with the highly complex but exciting subject of corporate fraud and corruption, which has since become the cops and robbers game of the 21st century: accounting fraud, embezzlement, bribery and many other forms of corruption and non-compliance cause turmoil between board members, supervisory board members and managers, while economic crime and corruption cause damages amounting to billions every year. When cases of misconduct and non-compliance become public knowledge, additional loss of reputation is the result, the consequences of which aren't even quantifiable for the companies concerned.Written by one of the most accomplished corruption and compliance experts, Dr. Stefan Heissner, this book provides comprehensive information on the controversial aspects of combating fraud and corruption from their beginnings. It also offers amazing insights into current practices in the war on fraud and corruption - including some stunning findings.

Dr. Stefan Heissner is head of the highly specialized division 'Fraud Investigation & Dispute Services' (FIDS) at EY, the global professional services firm, as the Managing Partner responsible for Central Europe and the CIS countries. Before being engaged for the last 15 years in the field of forensic auditing, Dr. Heissner also worked for the police force for 15 years - most recently holding the rank of Detective Superintendent. Heissner is an internationally renowned expert in the fields of criminalistics and compliance, as well as being the author of numerous specialist papers and a popular guest speaker.

Zielgruppe

Professional/practitioner

Autoren/Hrsg.

Heissner, Stefan

Inhaltsverzeichnis

1;Preface;6
2;Acknowledgments;10
3;Contents;12
4;About the Author;16
5;1: Drivers and Trends;17
5.1;1.1 Basic Features of Manager Liability;19
5.1.1;1.1.1 Basic Principles of Compliance Obligations;21
5.1.2;1.1.2 Liability Based on the Regulatory Offenses Act and Stock Corporation Law;24
5.1.3;1.1.3 Criminal Liability;25
5.1.4;1.1.4 Civil Liability;26
5.1.5;1.1.5 Labor Law and ``Political´´ Responsibility;27
5.1.6;1.1.6 Digression: Protection in the Form of DandO and Fidelity Insurance;28
5.2;1.2 Relevant Legislation and Its History;30
5.2.1;1.2.1 The Beginnings: Tulip Mania and the South Sea Bubble;30
5.2.2;1.2.2 Foreign Corrupt Practices Act: Starfighter and Bananagate;32
5.2.3;1.2.3 Sarbanes-Oxley Act: Criminal Energy and Creative Accounting;34
5.2.4;1.2.4 Dodd-Frank Act: Shackling the Banks?;39
5.2.5;1.2.5 UK Bribery Act: Well-Oiled Arms Trade;40
5.2.6;1.2.6 Legislation in Germany;42
5.3;1.3 Social Conditions and Drivers of White-Collar Crime;44
5.3.1;1.3.1 Deterioration of Social Control;46
5.3.2;1.3.2 Increasing Complexity;47
5.4;1.4 Trends in Regulatory and Liability Law;48
5.4.1;1.4.1 Completing the Legislative Framework for Combating Fraud;48
5.4.2;1.4.2 Stricter International Regulations for Combating Corruption;49
5.4.3;1.4.3 Regulating Access to Resources;50
5.4.4;1.4.4 Regulating Social Factors;51
5.5;Literature;51
6;2: Perpetrators and Offenses;53
6.1;2.1 White-Collar Crime: A Practical Definition;54
6.1.1;2.1.1 Different Aspects for a Comprehensive Understanding of White-Collar Crime;54
6.1.2;2.1.2 Alternative Term: ``Deviant Behavior´´;57
6.1.3;2.1.3 Overview of the Relevant Offenses Included Under ``Deviant Behavior´´;58
6.1.3.1;2.1.3.1 Elements of the Fraud Tree: Misappropriation of Assets;58
6.1.3.2;2.1.3.2 Elements of the Fraud Tree: Financial Statement Fraud;59
6.1.3.3;Specialist Information: Special Elements of Fraud;60
6.1.3.4;2.1.3.3 Elements of the Fraud Tree: Corruption;60
6.1.3.5;Specialist Information: Elements of Corruption;61
6.1.3.6;2.1.3.4 Money Laundering;62
6.1.3.7;2.1.3.5 Tax and Balance Sheet Fraud;63
6.1.3.8;Specialist Information: Elements of Balance Sheet and Tax Law (Excerpt);64
6.1.3.9;2.1.3.6 Other Relevant Offenses and How They Are Dealt with Under Criminal Law;64
6.1.3.10;Specialist Information: Elements of Insolvency Offenses (Excerpt);64
6.2;2.2 The Development of White-Collar Crime;66
6.2.1;2.2.1 White-Collar Crime: A Necessary Evil of the Market Economy?;66
6.2.2;2.2.2 Sociological Aspects in the Development of White-Collar Crime;67
6.2.3;2.2.3 The Fraud Triangle: A Standard Instrument for Explaining White-Collar Crime;68
6.2.3.1;2.2.3.1 Opportunity;69
6.2.3.2;2.2.3.2 Rationalization;69
6.2.3.3;2.2.3.3 Motivation;69
6.3;2.3 Motives for White-Collar Crime;70
6.3.1;2.3.1 Motive: Pursuit of Social Status;70
6.3.2;2.3.2 Motive: Feeling of Obligation and Emergency Situations;71
6.3.3;2.3.3 Motive: Obedience to Authority;71
6.3.4;2.3.4 Motive: Pragmatism;71
6.3.5;2.3.5 Motive: Ignorance;72
6.3.6;2.3.6 Motive: Career Ambitions;72
6.3.7;2.3.7 Motive: Boredom;72
6.3.8;2.3.8 Motive: Pressure to Perform;73
6.3.9;2.3.9 Motive: Revenge;73
6.3.10;2.3.10 Motive: Social Recognition;73
6.3.11;2.3.11 Motive: Peer Pressure;73
6.4;2.4 Perpetrator Typologies in the Area of White-Collar Crime;76
6.4.1;2.4.1 An Overview of the Perpetrator Typologies;77
6.4.1.1;2.4.1.1 The Crooks: Criminals Through and Through;78
6.4.1.2;2.4.1.2 The Gamblers: Untouchable;78
6.4.1.3;2.4.1.3 Free Riders: Particularly Clever;78
6.4.1.4;2.4.1.4 The Neglected: Being the Hero Just Once;79
6.4.1.5;2.4.1.5 The Unsuspecting: Good Employees;79
6.4.1.6;2.4.1.6 The Lost: Feeling Wretched;80
6.5;2.5 The Consequences of White-Collar Crime;80
6.5.1;2.5.1 Extent of the Damage Caused by White-Collar Crime;82
6.5.1.1;2.5.1.1 Damage to Company Assets;82
6.5.1.1.1;A Blessing in Disguise: Promptly Identified Damage;83
6.5.1.1.2;Every Minute Is Critical: A Creeping Exponential Loss of Value;83
6.5.1.2;2.5.1.2 Damage Due to Fines and Sanctions;83
6.5.1.3;2.5.1.3 Damage to Innovation and Competitiveness;84
6.5.1.4;2.5.1.4 Damage to Public Reputation;85
6.5.1.5;2.5.1.5 Damage to Employees and the Corporate Culture;85
6.6;2.6 Conclusion: Management Bears the Responsibility;87
6.7;Literature;87
7;3: Forensics;89
7.1;3.1 Commissioning a Special Investigation;91
7.1.1;3.1.1 The Trend in Public Prosecutor´s Offices: The American Model;93
7.1.2;3.1.2 The Public Prosecutor´s Office and Companies: Divergent Interests in the Investigation of White-Collar Crime;95
7.1.3;3.1.3 The Crime Enforcement Authorities and Companies: An Increasing Level of Cooperation;96
7.2;3.2 The Process of a Forensic Investigation;97
7.2.1;3.2.1 Assessing the Current Situation and Tactical Considerations for the Investigation;98
7.2.1.1;3.2.1.1 Understanding Your Own Mandate;98
7.2.1.2;3.2.1.2 Evaluating the Investigative Environment;99
7.2.1.3;3.2.1.3 Determining the Level of Available Information;100
7.2.1.4;3.2.1.4 Courses of Action;100
7.2.2;3.2.2 Three Basic Rules at the Start of an Investigation;101
7.2.3;3.2.3 Concealment and Cover-Ups: Examples from Purchasing and Sales Departments;103
7.2.3.1;3.2.3.1 Corruption in Purchasing: Extremely Difficult to Prove Unequivocally;103
7.2.3.2;3.2.3.2 Fraud and Bribery in Sales: Identifying Critical Areas;105
7.2.3.2.1;Following the Money Trail;105
7.3;3.3 The Criminalistic Process and the Formulation of Hypotheses;105
7.3.1;3.3.1 Physical Documentation as a Source of Information;107
7.3.1.1;3.3.1.1 Collecting Documents and Sealing Access to Them;107
7.3.1.2;3.3.1.2 The Forensic Analysis of Documents Suspected of Being Falsified;109
7.3.1.3;3.3.1.3 The Reconstruction of Business Processes Based on Company Documentation;109
7.3.2;3.3.2 Electronic Data Analysis as a Source of Information;110
7.3.2.1;3.3.2.1 Safeguarding Electronic Data and Data Media During a Fraud Investigation;111
7.3.2.2;3.3.2.2 Making Different Types of Data Useful;111
7.3.2.3;3.3.2.3 Forensic Data Analyses;113
7.3.2.3.1;The Analysis of Structured Data;113
7.3.2.3.2;The Analysis of Unstructured Data;113
7.3.2.3.3;Assessment: Use in a Criminalistic Context;115
7.3.3;3.3.3 Background Research/Business Intelligence as a Source of Information;115
7.3.3.1;3.3.3.1 Tracing Money Flows;116
7.3.3.2;3.3.3.2 Tracing Fraudulent Networks;116
7.3.3.3;3.3.3.3 Identifying Individual People;117
7.3.3.4;3.3.3.4 Checking the Facts;117
7.3.3.5;3.3.3.5 Research on the Internet and in Online Databases;117
7.3.3.6;3.3.3.6 Research in Registers and Archives;118
7.3.3.7;3.3.3.7 On-Site Visits;118
7.3.4;3.3.4 Interviews and Audits as a Source of Information;119
7.3.4.1;3.3.4.1 Deciding the Order in Which Interviews Are Conducted;120
7.3.4.2;3.3.4.2 Creating a Suitable Atmosphere;120
7.3.4.3;3.3.4.3 Limit the Topics of Discussion;120
7.3.4.4;3.3.4.4 Interviewing Skills and Critical Appraisals;120
7.4;3.4 Investigations in the Future;122
7.4.1;3.4.1 Offenses and Investigations Are Increasingly Driven by Technology;122
7.4.2;3.4.2 Investigative Work Is Becoming Increasingly More Specialized;123
7.4.3;3.4.3 Investigation and Prevention Are Becoming More Closely Linked;123
7.5;Literature;124
8;4: Systems for Combating Criminality;126
8.1;4.1 Critical Preliminary Remark on the Design of Compliance Management Systems;129
8.2;4.2 Methodological Principles for Compliance Management;133
8.3;4.3 Compliance Culture, Compliance Objectives, and Compliance Communication: Elements of Strategic Corporate Management and th...;136
8.3.1;4.3.1 Examining Employees and the Corporate Culture;137
8.3.2;4.3.2 Harmonizing Compliance Objectives and Compliance Communication;138
8.4;4.4 From the Risk Assessment, Through the Compliance Program and Compliance Organization to Constant Improvement: The Control ...;139
8.4.1;4.4.1 Compliance Risk Assessment;139
8.4.1.1;4.4.1.1 Evaluating Previous Cases of Misconduct;148
8.4.1.2;4.4.1.2 Analyzing the Organization and Processes;148
8.4.1.3;4.4.1.3 Scrutinizing the Company Finances and the Accounts Department;148
8.4.1.4;4.4.1.4 Example Application: Corruption Risks;149
8.4.1.4.1;Who Do I Conduct Business With?;149
8.4.1.4.2;Where Do I Conduct My Business?;150
8.4.1.4.3;What Business Do I Conduct?;150
8.4.1.4.4;How Do I Conduct My Business?;151
8.4.1.5;4.4.1.5 Summary of the Subject of Risk Assessments;151
8.4.2;4.4.2 The Compliance Loop;151
8.4.2.1;4.4.2.1 Prevention;153
8.4.2.1.1;Policies and Procedures: Creating a Core Content;153
8.4.2.1.2;Compliance Awareness: Combining Theory and Practice;155
8.4.2.1.3;Incentivization: Creating Positive Incentives;156
8.4.2.2;4.4.2.2 Detection;157
8.4.2.2.1;Risk Assessments and the Formulation of Criminalistic Hypotheses as the Foundation for Non-event-Based Controls;158
8.4.2.2.2;Basic Instruments of Detection: Data and Contract Analyses;160
8.4.2.2.3;Other Examples of Detection Instruments;162
8.4.2.2.4;Pre-employment Screenings;162
8.4.2.2.5;Business Intelligence and Third-Party Due Diligence;163
8.4.2.2.6;Approval Limits and Access Controls;163
8.4.2.2.7;Management and Monitoring of Master Data;163
8.4.2.2.8;Accompanying Data Analyses;164
8.4.2.2.9;Physical Stocktaking;164
8.4.2.2.10;Whistleblower Systems as an Instrument of Detection;164
8.4.2.3;4.4.2.3 Investigation: Integration into the Compliance Loop;169
8.4.2.3.1;Case Management: Setting Up a Case Database;171
8.4.2.3.1.1;Direct Follow-Up Measures After an Investigation;171
8.4.2.3.1.2;Authoritative Assessment of the Damages;171
8.4.2.3.1.3;Claims for Damages Against Responsible Managers;171
8.4.2.3.1.4;Disciplinary Measures Against Employees;172
8.4.2.4;4.4.2.4 Remediation;173
8.4.3;4.4.3 Organizational Principles: Responsibilities, Reporting Channels, and Setting the System Up as a Company Department;175
8.5;4.5 Testing and Evaluating Compliance Management Systems;179
8.5.1;4.5.1 IDW PS 980: A Calibration Tool for Fully Functional Preventative Systems?;180
8.5.1.1;4.5.1.1 IDW PS 980: A Critical Examination Based on Its Practical Application;183
8.6;Literature;187
9;5: A Look Ahead to the Future;189
9.1;5.1 Compliance in Germany: An Overview of the Current Situation;189
9.1.1;5.1.1 The Control Paradox of Compliance and Its Negative Effects;190
9.1.2;5.1.2 The Danger of Pro-Forma Solutions;192
9.2;5.2 The Next Step: Protecting Corporate Values with Integrity;193
9.2.1;5.2.1 Compliance as a Strategic Management Theme;194
9.3;5.3 The Requirement for Compliant Business Practices in Global Competition;195
9.4;5.4 The Path to the Future: Good Corporate Governance;196
9.5;Literature;198

Drivers and Trends.- Perpetrators and Offences.- Forensics.- Systems for Combating Criminality.- A Look Ahead to the Future.

Über Autor(innen)

Dr. Stefan Heissner is head of the highly specialized division “Fraud Investigation & Dispute Services” (FIDS) at EY, the global professional services firm, as the Managing Partner responsible for Central Europe and the CIS countries. Before being engaged for the last 15 years in the field of forensic auditing, Dr. Heissner also worked for the police force for 15 years – most recently holding the rank of Detective Superintendent. Heissner is an internationally renowned expert in the fields of criminalistics and compliance, as well as being the author of numerous specialist papers and a popular guest speaker.