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MANAGEMENT: Fraud Awareness Training Needed

 



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SOUTH AFRICAN companies need to implement effective fraud awareness training through in-house workshops and ethics training, in order to combat the country’s growing levels of private sector corporate crime.

This is according to Daniel Malan, head of the Centre for Corporate Governance in Africa at the University of Stellenbosch Business School (USB), who says that South Africa is estimated to be losing between R86 billion and R120 billion per year as a result of white collar crime. The educational investment needed is now urgent.

If there is a greater understanding of the ramifications of private sector fraud and the various ways it can be played out in the business community, combating it would be easier,” says Malan, who is also a member of a task group on anti-corruption formed by the UN Principles for Responsible Management Education.

Malan points to a recent survey by ITWeb, which revealed that, over the past three to five years, over 70% of local companies discovered fraud committed by their employees. Furthermore, the majority of companies that experienced internal fraud did not report it in order to avoid bad publicity and costly legal battles.

Malan believes that teaching more employees about the complexities of crimes like those involving tax swindles, insider trading, securities violations, kickback schemes and computer fraud, would create a greater awareness not just for those operating in the private sector, but also for those dealing officially with private sector crimes.

This sentiment is echoed by Willem Heath, former judge and investigator and now an advocate and head of Heath Executive Consultants, who says law enforcement officers dealing with private sector crime should go to business school to get to grips with the theory and practical implementation of commercial principles, as well as the basics of internet fraud.

We have too few police officers, magistrates and judges with sufficient knowledge of the mechanisms of commercial transactions to enable them to investigate corporate misdemeanour effectively. We need highly trained investigators who not only know the law but also have commercial experience and can understand financial statements,” says Heath.


 
 
 
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