Associated services

1. Anti-fraud Measures
These measures are typically found in entity wide programmes aimed at awareness campaigns. The entity needs to send a very strong signals to the fraudsters that frauds if committed will be discovered and that they will be dealt with under ‘zero tolerance’ policy of the entity. Fraud awareness programmes therefore involve sensitization of employees, contractors and beneficiaries about what frauds look like, how to recognize them, what to do with them, and what happens if these are reported by them. This is best achieved through workshops, seminars, leaflets, brochures, flyers, ticker notes, emails, posters, and other innovative ideas through which the message is communicated.

Fraud awareness alone does not deter fraudulent activities. It must be backed by strong capacity, capability and will to pursue the fraudsters. Red Flag would work at the operational levels after having assisted in the policy making at the top management.

2. Corporate oversight governance
In order to be more responsive to investors and stakeholders, companies are gradually embracing the best practices in the domain of accountability of independent and functional directors and Audit committee. This development obviously has pushed for suitable mechanism for periodic review of responsibilities as carried out by the Audit committee and the functional directors. Some of these may have become mandatory in many political jurisdictions. Examples are:

• Reviewing adequacy of internal controls and satisfaction as to their working efficiently.
  
• Review of annual financial statements before submission to the Board of Directors.
• Satisfactory accounting treatment of major entries in the books of account involving estimation of figures based on the management judgement.
  
• Review of changes in accounting policies, practices and procedures and understanding their impact on the financial results of the company.
  
• Review of related party transactions and their disclosure
  
• Understanding and responding to the qualifications included in the Auditors report to the shareholders.
  
• Responding to the major adjustments in Annual Financial statements due to the report of the Auditors.
  
• Reviewing the functioning of internal audit; its mandate, independence, work plan and objectivity.
  
• Reviewing the anti-fraud mechanism, whistle blower protection and anti-reprisal policies.
  
• Review of investments in subsidiaries (listed and unlisted).
• Use of funds obtained through public issue, rights issue or preferential capital issue.
• Matters related to and arising out of Social audit.
• Environmental laws and regulations and compliance thereof.
• Working of compensation committee and sanctions committee.

Whereas many corporate houses may have established the mechanism to constantly/periodically review these issues, it is the arm's length independent exercise that may give enhanced confidence to the directors and the Audit Committee members. Red Flag provides these professional services.

3. Investigation of reported instances
A whistle blower facility would typically highlight several instances of wrong doing. What happens thereafter? The mandate of the Ethicscall.net is to receive, categorize and analyse the reported instances through a well defined due diligence by domain experts. Thereafter, it is the responsibility of the top management to take action as deemed fit by them. Red Flag would off course help the management in investigating the cases if so desired by the management. Such investigation will be confidential and based on terms of reference. We have the capacity to investigate variety of frauds and wrong doings in the most professional manner.

4. Investigation of Systems failures
Systems failures are cited for majority of the instances of fraud and corruption. Systems that are poorly designed or compromised by discretionary powers lead to availability of opportunities to the fraudsters. Opportunity, peer pressure and rationalization for the fraudulent acts are the three major ingredients that brew the perfect frauds. Investigating the systems and to determine if they are working efficiently are the COSO requirements. Take a policy decision to determine annually the systems integrity and assure your Board of Directors of the reasonable steps taken to ensure health of your organization. Every systems compromise must be investigated professionally and stop the revenue leakages.

5. Development of governance document
Most entities conscious about their governance roles have prepared and communicated their governance documents to employees, contractors, shareholders and other stakeholders. However, these need periodic reviews and benchmarked to best practices as well as re-communicating them to the desired audience. Red Flag helps in preparing or reviewing the governance documents such as code of conduct, anti-reprisal policy, charters of Audit committee and ethics committee, and mandate of internal audit. It also helps in monitoring the ‘integrity pact’ if signed by the entity or help in implementing it if it so desires.

6. Managing financial disclosure programme
One of the transparent ways in which frauds and corruption can be prevented is the ‘financial disclosure programme’. This programme may be insisted upon by the terms of employment contract or introduced as voluntary programme within the organization. Whereas most governments, United Nations and multi-lateral development banks do require the periodic financial disclosure from their employees, it’s the manner in which it is handled that matters most. Managing financial disclosures involves periodic collection of information on acquisition and sale of shares and stocks, moveable and immovable assets, and conflicts of interest vis-à-vis the organization. It also involves analysis and dialogue with the employees as regards issues that need clarifications. Traditionally, these programmes are managed by the in-house legal or HR departments, but over the years, most entities find outsourced services to be more professional and acceptable to the employees.