NEW YORK, March 9, 2006 (PRIMEZONE) -- The threat of economic crime -- from simple cases of asset misappropriation to complex accounting manipulation -- is more prominent than ever on the agendas of chemical company directors and financial regulators. In fact, 37 percent of chemical companies reported being victims of economic crime over the last two years, according to PricewaterhouseCoopers' Global Economic Crime Survey 2005. In response, PricewaterhouseCoopers has developed a whitepaper titled "Protecting Chemical Companies Against Fraud, Reputation & Misconduct Risk" that provides guidance on how to develop an effective antifraud program.
"While it may not be possible to eliminate the risk of fraud altogether, a company can at least identify it early and minimize its damage with proper planning, policies and procedures," explained Saverio Fato, global chemicals leader for PricewaterhouseCoopers and co-sponsor of the whitepaper with Jonny Frank, Fraud Risks & Controls leader for PricewaterhouseCoopers.
The whitepaper provides step-by-step guidance on how to develop an effective antifraud program that addresses not only financial statement risk, but also reputation, operational, legal and strategic risks. In addition, it provides a summary of fraud schemes that are common to the chemicals industry.
PricewaterhouseCoopers suggests that corporations take the following five steps to develop an effective antifraud campaign:
1. Establish a baseline to assess existing antifraud programs and
controls and develop a remediation plan.
2. Conduct a fraud risk assessment.
3. Evaluate design and validate operating effectiveness.
4. Address residual financial reporting fraud risks.
5. Standardize process for incident investigation and remediation.
The whitepaper details the following common fraud schemes impacting the chemicals sector:
-- Financial statement manipulation -- Misappropriation of assets -- Unauthorized receipts & expenditures -- Aiding & abetting -- Fraud by senior management -- Disclosure fraud
"Fraud management makes good business sense, especially in light of the substantial local and national media that these companies receive," said Fato. "A chemical company that establishes an effective antifraud program will go a long way toward maintaining or restoring investor confidence in the integrity of its financial results. Equally important, reducing fraud will help a company to lower costs, improve profitability, protect its reputation and mitigate liability."
For more information on "Protecting Chemical Companies Against Fraud, Reputation & Misconduct Risk," please go to www.pwc.com/chemicals.
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively using connected thinking to develop fresh perspectives and practical advice.
"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
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