Covid-19 and corporate fraud: Study presents impacts and solutions in the area of compliance
Discussing the impact of the Covid-19 pandemic on vulnerabilities related to corporate fraud, with a focus on the areas of governance, risk and compliance (GRC) is the central focus of the article published in the GV Executive magazine “Covid-19: a window on corporate fraud ? ”. Professionals in these areas have noticed an increase in vulnerabilities due to organizational changes caused by the pandemic, but have also implemented actions to mitigate them.
Researchers Iedo Matuella Filho (master's degree from the Faculty of Economics, Administration and Accounting of Ribeirão Preto at the University of São Paulo - FEA-RP/USP), Claudio de Souza Miranda (professor at the Faculty of Economics, Administration and Accounting of Ribeirão Preto at the University of São Paulo - FEA-RP/USP) and Jonny Mateus Rodrigues (professor at the São Paulo School of Business Administration - FGV EAESP) used the fraud triangle theory, which considers pressure, opportunity and rationalization as predisposing factors to fraud .
Survey results showed an increase in risks across all three aspects of the fraud triangle during the pandemic. Surprisingly, companies invested in internal controls to deal with this increased risk. Furthermore, the study highlights the importance of GRC activities in reducing cases of corruption and fraud.
During the pandemic, companies adopted remote work, which brought internal communication challenges and increased cyber risks. However, there were investments in technology and cybersecurity. Companies have also strengthened their GRC activities, implementing crisis committees, strengthening integrity and making improvements in areas such as due diligence.
GRC professionals perceived a more stressful and less supervised environment due to remote work, which contributed to increased fraud risks. Most companies have invested in controls and technology to deal with these challenges.
As for the future, the research indicated that the adoption of remote work, the automation of processes and controls and the increased use of technology will continue to be trends. However, the crisis committee is seen as a temporary initiative.
The authors' recommendations include maintaining security when working remotely, investments in technology and controls, contingency plans, training in business ethics and an organizational culture of integrity. Additionally, leaders must lead by example and support integrity and compliance with regulations.
Read the full article on the website.
