The Anti-Fraud Collaboration engages with the news media to educate on how various stakeholders in the financial reporting supply chain are working to deter and detect financial fraud. If you are a member of the media, or would like to reach out to a particular Collaboration member, please contact any of the following individuals.


Washington, DC – The Anti-Fraud Collaboration continues to promote diligence in financial fraud deterrence and detection with the latest installment of its series of case studies. The new case study features fictional company LDC Cloud Systems, a rapidly growing global technology company whose board must contend with a bribery allegation and accounting abnormalities.

“The Anti-Fraud Collaboration is pleased to present the latest case study in our series designed to raise awareness of financial reporting fraud,” said Center for Audit Quality Executive Director Cindy Fornelli, on behalf of the Collaboration. “These case studies have proven to be valuable educational tools for all members of the financial reporting supply chain, as well as students.”

With a plot centered on a bribery allegation and questionable accounting oversight within the company, this hypothetical scenario is designed to provide the reader a better appreciation of how fraud situations can unfold and be addressed, including the importance of strong board oversight. The LDC Cloud Systems case study explores actions of management and the board in-depth, providing a timeline of decisions after they uncover potential problems within the company. The case study also illustrates how complex accounting practices common in today’s fast-changing business environment can make a company susceptible to fraud.

For classroom use, the Anti-Fraud Collaboration created a video series to bring scenes from the case study to life. The videos are available at the Anti-Fraud Collaboration website.

“New technologies can make for a disruptive business environment, and can create new challenges on existing business practices,” said Andrej Suskavcevic, President and CEO of FEI. “Resources like this case study provide a practical tool to help financial executives explore issues that can help to deter financial reporting fraud.”

“For internal audit, this case study provides powerful insight into the challenges even highly competent functions face when confronting complex risks that are compounded by deceptive actions within a company,” said IIA President and CEO Richard F. Chambers, CIA, QIAL, CGAP, CCSA, CRMA. “It also shows the importance of being adequately resourced to address such risks.”

“Audit committees serve a critical role in ensuring the long-term value of their companies. This case study serves as a valuable resource to help audit committees think through their roles in providing oversight of their companies’ financial controls and communications,” said Peter Gleason, president and CEO of NACD.

Anti-Fraud Collaboration case studies take participants through a hypothetical scenario about a fictional company dealing with fraud. Guided by an instructor, the participants then discuss what could have been done to address or help avoid the situation. Each case study offers a companion discussion guide for instructors, available on request.

LDC Cloud Systems is the Collaboration’s fourth case study. Others include the following:

  • Hollate Manufacturing focuses on understanding the conditions that can generate and perpetuate fraud and misrepresentation in financial reporting.
  • Carolina Wilderness Outfitters is intended to facilitate a discussion about how to conduct an internal investigation when fraud is suspected in an organization.
  • Kendallville Bank focuses on the importance of exercising skepticism as a participant in the financial reporting process.

Washington, DC – Improved accounting policies and internal controls are key for stemming fraud and reducing the number of financial restatements, according to a new report from the Anti-Fraud Collaboration. The report, Addressing Challenges for Highly Subjective and Complex Accounting Areas, compiles leading-practice recommendations from dozens of company executives, corporate directors, auditors, and regulators who attended two 2016 workshops to discuss ways to help deter fraud and enhance financial reporting.

“Companies are sharing leading practices and voluntarily working with regulators to help deter and detect financial reporting fraud,” said Cindy Fornelli, executive director of the Center for Audit Quality (CAQ), on behalf of the Anti-Fraud Collaboration. “The Anti-Fraud Collaboration is pleased to present these recommendations to help companies improve their accounting policies and system of internal controls. Investors, our capital markets, and public companies all win when we work together to combat fraud.”

The Anti-Fraud Collaboration held workshops in New York and San Francisco that brought together members of the financial reporting supply chain, including regulators, audit committee members, financial executives, internal auditors, and external auditors.

The workshops explored issues that were identified in an analysis of enforcement actions in which the U.S. Securities and Exchange Commission (SEC) took an action against an issuer or individual because of a securities violation and asserted that there were serious issues with the companies’ internal controls. The workshops also examined case studies as a catalyst for the discussions.

The report makes key recommendations concerning company accounting policies:

  • Accounting policies must adhere to technical accounting guidance. Supervisors and managers are responsible for implementation. It is critical that these policies be understandable to non-accountants who may not be conversant in the nuances of technical accounting.
  • Process must be married to policies. Accounting policies must be reviewed at regular intervals and address how to uncover and monitor changes in activities that impact accounting.
  • Policies must be tested in the field prior to implementation, and then monitored for compliance post-implementation.
  • Accounting policies in regards to revenue recognition should be granular because even slight changes in contract terms can have a major impact on revenue.

The report also outlines key recommendations regarding internal control over financial reporting (ICFR):

  • Tone at the top is an essential component of an ICFR regime.
  • A risk-based evaluation is the best approach for achieving effectiveness and efficiency in ICFR.
  • Internal controls over unusual and nonroutine transactions are sometimes overlooked or given less attention than core processes when developing an effective ICFR regime.

“Our members are highly committed to the deterrence and detection of fraud and are focused on their responsibility toward that effort, which includes overseeing the preparation of accurate financial information and the importance of designing, monitoring, and maintaining effective internal control over financial reporting,” said Andrej Suskavcevic, CAE, president and CEO, Financial Executives International (FEI). “We fully support the efforts of the SEC to promote cooperation and self-reporting.”

“Successfully battling fraud in financial reporting requires strong collaboration among all the principal players,” said Institute of Internal Auditors (IIA) President and CEO Richard F. Chambers, CIA, QIAL, CGAP, CCSA, CRMA. “This report is built on such collaboration and offers valuable direction and insight on improving accounting policies and internal control over financial reporting.”

“The sharing of leading governance practices is an essential element of effective board leadership,” said National Association of Corporate Directors (NACD) President and CEO Peter Gleason. “While this report is an important guide for all corporate directors, it will be especially of interest to our public company audit committee members.”

Coming to Terms with Short-Termism: Implications for Fraud
Date: Thursday, July 7, 2016
Time: 1:00 p.m.– 2:30 p.m. (EDT)


Goals for long-term value creation for a company’s investors may conflict with incentives that are introduced by short-term pressures, such as analysts’ expectations, internal profit targets, and compensation bonuses tied to short-term performance metrics. Emphasis on short-term results can increase the risk of financial reporting fraud if there isn’t alignment between the short-term goals and the long-term strategy. Organizations may not fully appreciate the long-term impact that the need to meet or beat short-term expectations—from the Street, or even from a supervisor or business unit leader—has on the actions that employees take. And employees may not fully realize the implications to the long-term strategy of the decisions they make when they give in to those pressures.

Learn how audit committees, financial executives, and internal auditors can help to improve the connection and identify ways to mitigate the risks of short-termism, and how the external auditors factor those risks into their audit planning and scoping. Our panel of experts will discuss what successful companies do to reinforce the alignment between potentially conflicting goals, and provide actionable recommendations that each supply chain member can implement in their organizations.

We encourage all of the key players in the financial reporting supply chain—audit committees, financial executives, internal auditors, and external auditors—as well as compliance professionals, to register for this informative program.



Douglas Chia
Executive Director
The Conference Board Governance Center

Karen Horn
Senior Managing Director
Brock Capital Group

Bill McCracken
Executive Consulting Group

Jose Rodriguez


Cindy Fornelli
Executive Director
Center for Audit Quality


Free-of-charge ethics courses can be taken online for CPE credit

Washington, DC – Leveraging its successful series of webcasts, the Anti-Fraud Collaboration today unveiled a set of online self-study courses for corporate ethics training. Housed on the learning platform of the American Institute of CPAs, the courses can be taken free of charge and with the potential of earning up to two continuing professional education (CPE) credits per course.

The self-study program—suitable for accountants, financial executives, directors, external and internal auditors, and other members of the financial reporting supply chain—tracks the topics covered during the webcast series. The courses are the following:

For each course, a panel of experts examines the topic at hand from a variety of perspectives. Panelists in the webcast series have included, among others, leading public company auditors, law partners, internal audit executives and chief ethics compliance officers, as well as representatives from the director and regulatory communities.

“At companies of all sizes, the importance of sound ethics in deterring and detecting financial fraud cannot be understated,” said Center for Audit Quality Executive Director Cindy Fornelli. “We are pleased that the abundance of perspectives, tips, and best practices on ethics programs shared during these webcasts can be of even greater value through the added structure of this self-study series.”

“Resources such as these online ethics courses are precisely what we envisioned when we formed the Anti-Fraud Collaboration five years ago,” said Michele Hooper, President and CEO of The Directors’ Council and Co-Chair of the Anti-Fraud Collaboration. “Together, we are leveraging the collective expertise of these organizations for the benefit of all.”

The new online courses build on an impressive and growing platform from the Anti-Fraud Collaboration.

“Our mission at Financial Executives International is to advance the success of financial executives, their organizations and the profession. Integrity and ethics are facets that are core to the values of financial executives, and key to their success. This self-study series offered by the Anti-Fraud Collaboration provides valuable tools in building awareness of financial fraud, deterrence, detection and reporting best practices,” said Andrej Suskavcevic, President and CEO of Financial Executives International. “We look forward to the success of these courses as they continue to educate the industry on ethics.”

“NACD is proud to be a part of the Anti-Fraud Collaboration and welcomes this new self-study series to foster greater integrity in financial reporting and corporate culture,” said Ken Daly, CEO, National Association of Corporate Directors. “Working together, directors, auditors, financial executives, and internal auditors can make a positive difference for our companies and the global economy.”

“Having a strong ethical corporate culture is fundamental to good governance,” said The Institute of Internal Auditors President and CEO Richard Chambers, CIA, QIAL, CGAP, CCSA, CRMA. “A robust ethical corporate culture helps deter and detect financial reporting fraud. These online, self-study courses are another valuable contribution to the body of work of the Anti-Fraud Collaboration.”

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About the Anti-Fraud Collaboration

The Anti-Fraud Collaboration represents the collaborative efforts of the Center for Audit Quality, Financial Executives International, The Institute of Internal Auditors and the National Association of Corporate Directors, organizations that actively engage in efforts to mitigate the risks of financial reporting fraud. The Collaboration’s goal is to promote the deterrence and detection of financial reporting fraud through the development of thought leadership, awareness programs, educational opportunities, and other related resources specifically targeted to the roles and responsibilities of participants across the financial reporting supply chain.

For Further Information

Center for Audit Quality
Erica Hurtt, Senior Director of Communications

Financial Executives International
Lili DeVita, Vice President, Marketing and Communications

National Association of Corporate Directors
Henry Stoever, Chief Marketing Officer

The Institute of Internal Auditors
Robert Perez, Manager, Media Relations