Deterring and Detecting Financial Reporting Fraud

The Center for Audit Quality just released a new report - Deterring and Detecting Financial Reporting Fraud - A Platform for Action, which I downloaded. The report focuses on financial reporting fraud at publicly-traded companies of all sizes, and its recommendations are intended to be scalable to different situations. I found it to be a pretty comprehensive report, with guidance that would be applicable for any organization (large, small, public, private, etc.) looking to improve internal operations and mitigate the risk of financial reporting fraud.

As it is a 55 page document, I won't try to summarize all the salient parts here, but I did think their top three characteristics in organizations where this risk in minimized are worth repeating:

• A strong, highly ethical tone at the top that permeates the corporate culture
  
• Skepticism - a questioning mindset that strengthens professional objectivity, on the part of all participants in the financial reporting supply chain
• Strong communication among supply chain participants

Given the corporate scandals that have emerged over the past few years, have you assessed your compliance and audit strategies with an eye toward mitigating this risk?