FINANCIAL FRAUDS AND CRIMES RELATED TO SUSTAINABILITY MANAGEMENT POLICIES OF ENTERPRISES
1. Essence of the concept of “fraud”. Main types of frauds; 2. Financial frauds related to enterprises’ sustainability management policies; 3. Methods for prevention and detection of financial frauds committed by enterprises as a result of implementing sustainability management policies
Abstract
The paper is devoted to financial frauds and crimes related to sustainability management policies of enterprises. This type of financial frauds involves the unlawful appropriation by enterprises of cash – European, national, municipal, or those of other stakeholders, in connection with the implementation of the governance aspect of sustainability. Such frauds are manifested in illegal misappropriation of assets or deliberate failure to invest in assets; in falsification of primary accounting documents and information from ongoing accounting records; in distortion, selective and inaccurate disclosure, omission, or non-disclosure in enterprises’ financial statements of their incurred or non-incurred expenses and investments in assets related to the implementation of sustainability management policies of enterprises. Financial frauds of this nature may also be associated with significant limitations on the performance of independent financial audits of enterprises’ financial statements, violations of the true and fair presentation of financial and non-financial sustainability information in enterprises’ reports, or actions related to breaches of the honesty and integrity of enterprises’ management and managerial teams. It is necessary to adopt preventive measures aimed at the timely detection and prevention of financial frauds and crimes related to the implementation of sustainability management policies of enterprises. The objective is to establish unified rules and good practices for the adoption of preventive measures that can prevent or ensure the timely detection of financial frauds and crimes committed by enterprises in the course of implementing their sustainability management policies. Furthermore, it is necessary to improve the management of assets and expenses incurred by enterprises in implementing sustainability management policies and to develop precise risk management systems addressing sustainability-related risks. To this end, effective coordination and strong partnerships with various international institutions and organizations are required in order to prevent all types of financial frauds and crimes committed by enterprises in the course of their activities.
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