Since January 1996
|
Risk Management
Sarbanes-Oxley is more than just about the
end result of timely and accurate financial statements.
Sarbanes-Oxley is also about getting there: ensuring that those
financial statements are produced when they need to be and are done so
accurately.
Fraud in the supply chain can have a direct impact on both the ability
to produce financial statements on a timely basis and the accuracy of
the information in the financial statements.
One of the more popular Sarbanes-Oxley compliance frameworks - COSO -
specifically lists Risk Assessment as one of its 5 key framework
aspects.
Essentially, (public) companies must perform a risk assessment.
And without a doubt, the determination and severity of fraud should be
one of the risk assessments high on the priority list.
The failure to assess risks is in-and-of-itself a risk, and one not
worth taking.
Leaving fraud to itself results in more risk, as small frauds become
greater crimes because the perpetrators see that they can get away with
larger-scale frauds. As such, the supply chain is placed in
greater risk, as is the company itself.
Private companies looking to go public via IPO would be well-advised to
begin their risk assessments early. Even remaining private,
companies can not risk failing to detect and reduce supply chain frauds.
|
The failure to manage supply chain fraud
is a pretty big risk, especially for public companies who have to comply
with Sarbanes-Oxley.
|
