• MANAGING RISK IN A DIGITAL ENVIRONMENT

MANAGING RISK IN A DIGITAL ENVIRONMENT

Violet Chinyanta Kabaso , Business Services and Outsourcing |

26 April 2018

Integrated fraud services at BDO.   

The rules of business, how we engage with clients and staff continue to change as technology advances. Work is no longer 9 to 5, with staff physically present at the office, Monday through Friday. With increasing integration of flexible work arrangements, they work from home, on site at clients’ offices and even offshore. Client documents are delivered using email, file transfer protocol (FTP), virtual private networks (VPN) or shared networks and cloud file sharing technologies, thereby increasing data loss or exposure risk. As custodians of personal and business information, we have the responsibility of putting measures in place to protect data and minimize exposure risk.

Our developing digital office environment, advances in technology and increased opportunity for risk demand the need for data protection laws, improved regulatory oversight and continued best practices in business ethics. Business owners have the onus to remain vigilant in an effort to mitigate operational and reputational risks, failures that can lead to fraud. Whether a business with paper-based processes or one transitioning to a digital environment, the concern persists, management must respond and institute measure to mitigate risk.

Managing the digital environment in an emerging market presents its own unique challenges.  Businesses in Zambia are inundated with exposure to risk that range from financial to compliance, operational and reputational risks different from those in developed countries. Access to finance, ease of doing business and the perception of corruption are additional considerations. Transparency International conducts annual research on global corruption perception at the country level. The Corruption Perception Index ranked Zambia as 96 from 180 assessed countries in 2017 while we ranked 87 from 176 in 2016. The rating scale scores countries “where 0 as highly corrupt and 100 as very clean.” Zambia’s score of 37 in 2017 indicates the world’s perception of our public sector is that it is highly corrupt.

Companies operating in Zambia and managing risk in the digital environment have to contend with the unseen risks of doing business in an emerging market. The question is, what happens when systems and processes fail and you find your business exposed to risk and fraud. We identified ten (10) business oversights, if left unchecked, create environments primed for increased likelihood of exposure to risk and fraudulent practices.

  1. Lack of awareness of fraud risk factors
  2. Inadequate accounting internal controls and processes
  3. Inefficient information technology (IT) general and application controls 
  4. Failure to implement data privacy, protection and loss prevention policies
  5. Inadequate screening practices for employees, suppliers and customers
  6. Insufficient understanding of ethical duties at all levels
  7. Ineffective mechanisms for identifying, controlling and assessing risk
  8. Lack of fraud reporting and responding procedures
  9. Inadequate board and audit committee oversight
  10. Limited knowledge of political, economic and technological environment  

At BDO we believe that “knowing is always better.” Our integrated fraud prevention, forensic investigation and computer forensic services provide clients with objective information to make informed business decisions. Our methodology ensures information is gathered in a legal and ethical manner allowing clients to take corrective action. Working with us, your business will significantly improve chances of recovering stolen assets from identified offenders.

To learn more about our integrated audit services, submit enquires to contact@bdo.co.zm.


Disclaimer 

Please note that the information contained in this news article is of general nature and is not meant to be comprehensive. Readers should not act on such information without seeking professional advice specific to their circumstances.

About BDO Zambia 

BDO Zambia Limited, a Zambian Company, is affiliated to BDO Zambia Audit Services which is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

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