You work as the new Chief Compliance Officer for a multinational company that produces consumer goods. The company is expanding into an emerging market in Brazil. See the following facts about the company:
i. They employ 30,000 people worldwide
ii. Have very decentralized accounting and procurement processes
iii. Managed by an autocratic CEO who very much wants to expand into the new market.
iv. The CFO has just been hired and worked for the CEO in a previous company. They have a strong relationship and the CFO supports the CEOs strategic goals.
v. Executive management salary is paid through salary and bonus. The bonus potential is significant and driven by earnings per share, which could be greatly increased if this expansion is successful.
vi. The previous 2 years of profitability has been very poor and the company missed 5 quarters of earnings targets.
vii. Has never employed anyone in Brazil before this expansion.
viii. The market in Brazil consists mainly of government owned entities.
ix. The sales of product to government owned entities are competitive.
x. Your sales force is fairly young and inexperienced.
xi. The company has just announced a significant layoff and reduction in spending.
xii. The Director of Sales and the previous CFO were recently fired for overstating revenue for the previous quarter.
Based on your learnings throughout the course, answer the following questions.
1. What Seven Signs risks are you most worried about? (pick 3 of the 7)
2. What basic elements of an ethics and compliance program would you recommend immediately and why (pick 4) – provide solid reasoning for your recommendations
3. What attributes of an effective CCO will be most important to you in this role? (pick 4)
4. What fraud risks are you most worried about for this expansion? State your reasons.
5. What basic antifraud programs and controls will help reduce these risks?