3 Potential non-compliant behaviors driven by the pandemic crisis

Posted By putri Articles compliance, due diligence, whistleblowing

Extreme disruption in the business world due to the pandemic has left many companies around the world to be even more susceptible to fraud than ever. The slowing down of the global business wheel has forced many companies to shut down. Whereas the lucky ones have cut their spending to operate more efficiently and institute remote working policies for their employees.

However, the tight budget and relaxed controls could drive an individual to implement non-compliant behaviors in order to meet business targets or just to gain extra benefits for their own personal interest. The non-compliant behaviors may lead to fraudulent actions. Here are at least three non-compliant behaviors during the pandemic crisis that should be anticipated by companies.

1. Skipping due diligence

A survey done by The Supply Chain and Automotive Technology team at IHS Markit highlighted that one-third of suppliers reported moderate to severe effects because of the pandemic crisis. From the survey we can draw a big picture of how the pandemic has affected other suppliers from almost all industries.

The affected third-party suppliers have forced surviving companies to quickly seek alternative third parties, with only a few options to choose from. The limited options drive the companies to skip due diligence. With the lack of controls, the finding of alternatives could be a vulnerable area for fraud risks, such as kickbacks and gratification.

2. Bribery

Some see the crisis as an opportunity to gain benefits for their own personal interest. Charitable organizations and companies with charity programs are exposed by potential frauds such as bribery. An example would be how an individual in the company might abuse their power by making a donation to a particular organization as a trade-off for a partnership contract.

3. Falsification of financial records

Relaxed control during a crisis is an opportunity for an individual to hide their corrupt acts. They might see it as a perfect time to embezzle or corrupt the company’s cash and make falsified financial records to hide their crime. Or, due to the extreme global business pressure, an executive-level employee may make a falsified financial statement to hide the company’s bad financial circumstances due to significant unachieved business targets.

Maintain your company’s compliance

Since frauds do not discriminate and do not wait, it is important that companies are ready and equipped with a resilient prevention plan that will also ensure of the company’s compliance with the law. Integrity Indonesia as a company that has more than seventeen years of work in the field of compliance provides efficient solutions for ensuring your company’s good governance and business certainty. We also provide improvements for fraud detection and swift infringement investigations. We provide the expertise and the technology to assist your company with its compliance requirements. For more information about our compliance services, contact us today!

3 Potential non-compliant behaviors driven by the pandemic crisis