With focus onprevention, detection…
PRESIDENT of the Guyana Manufacturers and Services Association (GMSA), Mr. Ramesh Dookhoo contended yesterday that Guyana, as a developing nation, needs to, generally, develop its culture of accountability and integrity in personal lives and institutions.
He was the featured speaker at a seminar/workshop hosted by the local chapter of the Institute of Internal Auditors (IIA),  in Hotel Tower, Main Street, Georgetown.
It was the first such IIA undertaking for 2010 and focused on fraud prevention, detection and investigation.
The programme also dealt with increased understanding of fraud and corruption and the types: why they occur; senior management and internal audit and anti-fraud and anti-corruption policies and procedures.
Dookhoo said the profession of internal auditing is a key aspect of accountability, in terms of actions, expressly the way of managing and setting the tone for good governance.
“We believe that the key to better run institutions lie in the system of transparency and accountability in decision making, in compliance with the laws of the jurisdiction and in following the general principles of good governance,” he added.
Dookhoo said the bottom line is the creation of a better environment for the prevention and detection of fraud, which lies in openness, acceptance that there is a problem, criminal prosecution and subsequent strengthening of systems designed to enhance accountability, from the bottom up, as well as developing an anti-fraud policy in a company.

‘…the introduction of an anti-fraud policy should prove successful, as  95 per cent of all detected frauds in Guyana go unpunished because of the slow pace of the justice system and the lack of any forensic accounting services’ –  Mr. Ramesh Dookhoo

The latter, he said, would necessitate guidelines for reporting fraud, what to do if a suspicious transaction is detected, related disciplinary action, who should investigate, criminal proceedings, gathering evidence and enhanced board involvement.
In his opinion, the introduction of an anti-fraud policy should prove successful, as  95 per cent of all detected frauds in Guyana go unpunished because of the slow pace of the justice system and the lack of any forensic accounting services.
Dookhoo said the most important aspect of the non-prosecution for fraud is the loss of face by institutions and companies, their unpreparedness to deal with and disclose it and the lack of recognition of the responsibility on the part of the audit committee.
Additionally, he observed that there is room in every institution for an effective internal audit department which is the focal point for the unearthing and investigating of frauds in institutions.
“We need to create an environment that encourages the free functioning of an unhindered unintimidated, freely functioning audit department that is accepted by the board and management and, in turn, guided by a set of rules of engagement that are  understood by all line managers,” Dookhoo stated.
He said, importantly, internal auditors must act responsibly in keeping with an established code.

UNDETECTED
“The external auditor now merely goes to the extent where he needs to certify the accounts against material misstatements. So, based on the external auditor’s definition of materiality, the organisation can be losing millions of dollars in illegal activity that goes undetected,” Dookhoo posited.
He said, at the national level, there is need for audit committees to become mandatory for Government agencies.
“Already an integral part of government in Australia, New Zealand and the United Kingdom, audit committees are making a positive impact on government agencies,” Dookhoo pointed out, noting that mandatory audit departments and committees can quickly accelerate public trust in national institutions and government boards.
In that context, he recommended the installation of competent audit departments in all public and private companies locally.
Also, at a national level, Dookhoo said for efforts to be effective and engender the commitment of all stakeholders, a must is education.
On a much broader scale, regionally, he said the concept of collaboration with  regulatory bodies is of utmost importance, in light of the recent fall of Colonial Life Insurance Company (CLICO).
He said there is much to be done towards harmonising Caribbean regulators and that should be fast tracked to define the region as an economic entity, with Caribbean regulators demanding their independence, guided by the institution’s mission and responsibilities to their individual and collective jurisdictions.
Mr. John Seeram, President of the IIA Guyana Chapter, said, as organisations struggle to remain financially viable, the last thing they need is fraud.
He said: “At the end of the day, there are quite a number of frauds that happen but are not reported. It is difficult to estimate the number of frauds that are committed because, for different reasons, companies do not make them public.
However, Seeram said the IIA is very sensitive to the increasing number of frauds being detected over the past year and is taking the lead role to address the issue on hand.
Following the seminar, an overseas practitioner, Mr. Lal Balkaran, from the Toronto IIA Chapter and IIA Executive, made a presentation to participants from both the private and public sectors, who shared their experiences on fraud indicators, prevention, detection and investigations.