Week 2: Governance's Role in Protecting Organisations against Fraud, Bribery and Corrpution

In a survey conducted by Price Waterhouse Coppers, it was determined that over a third of businesses have been impacted by fraud within the last two years (PwC, 2020). Businesses have shown that without the appropriate governance systems, organisations fall susceptible to various risks, due to the lack of appropriate decision making, accountability and values within top management. 

Although, hiring only ethical employees would theoretically prevent internal fraud, the way employees behave comes down to the values management instil in the business. I experienced this where a new employee appeared to be ethical during the hiring process, however in a way to get back at management due to working longer hours, they began to take small amounts of money out of the cash register. 

The COBIT-5 toolset demonstrates that a holistic approach is required to ensure efficiency, security and success. It notes that, people within the corporation are a significant risk in regards to fraud, and, to reduce this, management should implement: training, management expectations and an ethical culture which flows down the business (Preittigun, Chantatub, & Vatanasakdakul, 2012).

Further, as corporations now almost fully integrate information technologies into their business processes and procedures, the need for governance around their IT is paramount. IT governance consists of processes and organisational structures to manage risk and safeguard information (Benaroch & Chernobai, 2017). Organisations are now storing a majority of their sensitive information within databases. If the appropriate security and processes are not in place, both internal and external fraudsters can access this information with ease. Further demonstrating the ways in which the appropriate implementation of governance protects organisations against fraud, bribery and corruption.

Additional Information: 

References 

Benaroch, M., & Chernobai, A. (2017). Operational IT Failures, IT Value Destruction, and Board-Level IT Governance Changes. MIS Quarterly, 729-762.

Governance Institute of Australia. (2019, January 24). What is Corporate Governance? [Video]. Youtube.

Orbus Software. (2014, March 13). What is COBIT 5? [Video]. Youtube.

Preittigun, A., Chantatub, W., & Vatanasakdakul, S. (2012). A Comparison between IT governance research and concepts in COBIT 5. International journal of research in management and technology, 581-589.

PwC. (2020). PwC’s Global Economic Crime and Fraud Survey 2020. Melbourne: Price Waterhouse Coopers.