I need a reply to this initial post from a fellow student. The question that was asked is here and this is the initial post. Please write 2-3 paragraphs regarding the initial post and ask an open-ended question at the end. Please add one reference and in-text citation.
Question: Based on the readings for this week, why do you think that some companies have failed to effectively implement policies to prevent corporate fraud?
My classmate’s initial post: Please address her as “Hi Aleshka,”
The effectiveness of a policy implementation is awareness. Overstating financial information has been the common practice to pretend to be successful in the organization and a comprehensive compliance program would have help the organization to promptly identified past companies’ issues. However, if the information is not disseminated within an organization, any prevention or mitigation can be expected. The distribution of rules and ongoing education to every employee starting from the investors to the lower level employees, would create a compliance culture that will support the reporting of potential fraudulent activities. Big companies have failed in this initiative since the top of the organization is not well informed of the consequences of inappropriate actions and may think that it is a normal practice. However, there are instances of the intention to defraud which can be noted if other staff are well informed about the methods of report fraud, who to report and law protections to whistleblowers. Zinski (2005) explained that once a report is received, the investigation needs to be initiated by the audit committee or compliance department, “But once the whistle is blown, the audit committee needs to investigate and act on the recommendations that follow.” Receiving the report to start the investigation is a key aspect of an effective implementation of a corporate fraud prevention policy.
Zinski, C. August 2005. Community Banker. Whistling to the Audit Committee: How an Internal Investigation Begins. Retrieved from http://web.a.ebscohost.com.prx-necb.lirn.net/ehost/pdfviewer/pdfviewer?vid=1&sid=3f975952-c185-44fc-ba0a-b64507fa9399%40sessionmgr4010Links to an external site..