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Starting a Business? Running a Business?
For many small business owners, using a lawyer is akin to calling a fireman or plumber: one does it only when there’s a problem. For businesses, especially new ones, needs such as marketing, sales, staffing and just getting the business off the ground can easily take priority over legal issues, particularly ones that don’t seem to be of immediate concern. But smart business planning also includes preventing problems and making sure the business is protected against potential trouble.
While most corporations will use an attorney to help with the process of incorporation, new businesses sometimes neglect the on-going legal requirements to maintain their corporation status. Annual shareholder, director and partner meetings need to be held, and recording of minutes and election of officers must conform to state requirements. Failure to do so could jeopardize corporate status and result in “piercing of the corporate veil” in the event of a lawsuit or other legal action, exposing corporate officers to personal liability or other legal problems.
Many intangible assets of a business should be legally protected. A company’s name, logo, brand name and distinctive goods and services are entitled to copyright protection. Proprietary computer software, semiconductor chip mask designs, vessel hull designs and many other creations may be eligible for trademark registration. Patents are often thought to cover only machines and other manufactured products, but can also protect processes, such as a method for refining petroleum, or new compositions of matter, such as chemical compounds or mixtures. Trademark, copyright and patent registrations can help a business protect the things that give it a competitive advantage in the marketplace.
Many companies, especially technology companies, count the knowledge of their employees as some of their most important assets. Yet they fail to protect those assets through non-disclosure and non-compete agreements with their employees. Inevitably, some employees will leave the company, and it’s important to protect your business against their taking their knowledge of trade secrets with them over to the competition.
Entrepreneurs sometimes are so focused on starting a new business that they don’t consider what happens if one of the principals leaves the business. When a partner or major shareholder decides to suddenly exit, it can potentially threaten the ability of the business to continue operating. Closely held corporations need to have buy-sell agreements or buy-back agreements to ensure that partners or major shareholders can sell their interest without legal entanglements or placing an undue financial burden on the company.
What about the cost of dealing with all these issues? Good lawyers are not cheap, but then again neither is any other consultant critical to your business. A brief consultation with a lawyer can often determine what a business’ legal needs are. An investment of a lawyer’s time, like a fire code inspection or medical check-up, can help prevent major problems down the road.
Courtesy: The Legal Department of ICAN
By OBAL USANG EDET USANG
The cost of occupational fraud in Nigeria is enormous and there is need to do more to stem the tide. The ndependent Corrupt Practices and Other Offenses Commission and the Economic and Financial Crime Commission are doing their best at chasing offenders. However, it is better to defend public treasures from being plundered in the first place than trying to recover losses later as most victims in organisations including the public sector never recover all the losses. In order to be on the proactive, basic pre-employment screening should be introduced into the recruitment process in the public sector in addition to other government efforts. This process would help weed out potential fraudsters before they have opportunity to hatch their cruel schemes.
Keywords: Occupational Fraud, Pre-employment Screening, Public Sector, Recruitment.
Employees are the most valuable assets of an organisation as they determine to a large extent the continued existence and competitiveness of the organisation (Chin, Lin, Hsiung & Liu, 2006). An organisation that has in its employ persons with the right skills, right attitude and integrity is verily on the path to success. Selecting credible employees for the overall health and continuity of an organisation has received close attention by academics and practitioners in the field (Brody, 2010; Smith, 2012; Wang & Kleiner, 2012). Employing persons with doubtful characters can be the most devastating decision in the long run. Every employee has a motive for joining an organisation and it is the responsibility of every organisation to decipher possible clues to dishonesty at the point of recruitment in order to avert future consequences. Therefore, finding the right kind of employees is important for the continued survival of the organisation.
Engaging wrong persons can be very costly for an organisation especially with the rising wave of occupational fraud across industries all over the world. In a survey by Association of Certified Fraud Examiners (2012), an organisation losses five percent of its revenues to fraud and most of these fraud cases took 18 months to uncover and were perpetuated by trusted employees. Therefore, organisations owe themselves a duty to protect against internal thieves. The best way to tackle internal fraud is to be on the defensive, and to be on the defensive is to install a very good personnel control mechanism which includes pre-employment screening (background checks).
The Nigerian public sector is in dire need of morally credible persons who will transform the civil service to an enviable place for professionalism, transparency and integrity that all Nigerians could be proud of. The current wave of employee fraud in the Nigerian public sector has reached an alarming rate, hardly a year passes without reported cases of occupational fraud in our media (Sahara Reporters, 2011; The Nation, 2013). The anti-graft agencies: Independent Corrupt Practices and Other Offenses Commission ICPC) and Economic and Financial Crime Commission (EFCC) are working hard to stem the tide but as Osisioma (2012) puts it, fraud in Nigeria is ‘systematic’. Therefore careful planning is required to protect the public sector against internal thieves and other crimes. Courtenay (1998) asserts that pre-employment screening, which holds potentials for deterring fraud is ‘often overlooked’ by employers.
The purpose of this article is to highlight the connection between pre-employment screening and reduction of occupational fraud in the public sector. Specifically, the paper examines pre-employment screening as a factor in reducing occupational fraud in the public sector. This paper will benefit policy makers in the public sector charged with the responsibility of recruitment. Also, other human resource practitioners will find the paper helpful in decisions bothering on recruiting credible persons that would contribute to health of their organisations.
CONCEPT OF EMPLOYEE FRAUD
Fraud itself has been variously defined by scholars and various terms have been used to describe the phenomena including white collar crime, occupational fraud, internal fraud, etc. Gottschalk (2011) defines white collar crime as ‘crime against property for personal or organisational gain, which is committed by non-physical means and by concealment or deception. It is deceitful, it is intentional, it breaches trust and it involves losses’ (p.302). A look at the above perspective pictures white collar crime into two categories; corporate fraud and occupational fraud. Corporate fraud is fraud committed by a corporate body against other corporate bodies and occupational fraud simply means employee fraud. A more specific definition of occupational or employee fraud is as put forward by Association of Fraud Examiners (ACFE) in their 2012 report to the nations. Occupational fraud is ‘the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organisation’s resources or assets’ (ACFE, 2012 p.6). From the above definition, occupational fraud involves acts of deceit and deliberate concealment to avoid being caught for as long as it takes. This paper focuses on occupational fraud or employee fraud. These two terms are used interchangeably throughout the paper to mean fraud perpetrated by employees of an organisation.
Occupational fraud schemes fall into three categories: asset misappropriation schemes, corruption schemes and financial statement fraud schemes (Wells & Gill, 2007). In addition to occupational fraud schemes, certain characteristics such as employee position in the organisation, tenure, age and gender are predisposing factors in the perpetration of employee fraud. A strong correlation is reported between a perpetrator’s position, tenure of employment in an organisation and fraud (ACFE, 2012). Based on ACFE (2012) survey, reported cases of occupational fraud in Africa, based on perpetrator’s position show that employee fraud accounted for 46.7 percent, manager 38.1 percent, owner executive 12.4 percent and others 2.9 percent. Fraud cases by tenure of employment showed that the longer an employee spends on the job the more likely he may become fraudulent. The ACFE (2012) findings also suggest that fraud losses tend to rise with the age of the perpetrator and perpetrators within the age bracket 31-45 years caused the most losses. Also, in terms of gender, a man is more likely to defraud his employer than a woman.
Although it is very difficult to determine who intends to commit fraud, literature suggests that carrying out some basic pre-employment screening could help organisations including the public sector reduce the likelihood of hiring fraudulent persons. For example, Buckhoff and Colson (2003) in an analysis of three case studies concluded that fraud could have been prevented had the employers carried out some pre-employment screening. This implies that pre-screening applicants can reduce an organisation’s susceptibility to employee fraud as it provides an early signal of potential dangers which could be avoided (Schloss & Lahr, 2008; Hollman, Hayes & Mahurin, 2007). Although not empirically proven, Drysdale and Bonanni (2010) assert that the return on investment on pre-screening employees could be up to 26 times. The implication is that more resources would be at the disposal of employers in the long run for making the right hire decisions. Given the many benefits of pre-employment screening, it is imperative that those charged with the responsibility for recruitment into the Nigerian public sector pre-screen all potential employees before offering them employment as a way of reducing the risk of fraud.
EMPLOYEE FRAUD: NIGERIA’S EXPERIENCE
A KPMG (2012) Africa fraud survey found that Nigeria had the highest reported value of fraud and the cost of fraud was put at N468 billion ($3 billion). Employees, government officials, and top executives of private companies were the worst offenders by the report. The report also noted that government was the hardest hit by losses (30 percent) from occupational fraud and corruption. Given the gravity of occupational fraud in the Nigeria, the government must take proactive steps to reduce the negative impact of fraud in the public sector.
Occupational fraud robs Nigeria of quality service delivery, quality education, quality infrastructure, quality health care and all the good things you can think of. Although Nigeria’s vision 20:2020 has a focus on ‘creating disincentives for corruption by addressing structural deficiencies that create the platform for corrupt activities’ (National Planning Commission, 2009. p.27), fraud in the public sector remains a challenge.
A look at Nigeria’s rating on Transparency International Perception index shows that Nigeria’s rating on the corruption index has not really improved: 130th, 134th, 143rd and 139th for 2009, 2010, 2011 and 2012 respectively. Given the above pathetic ratings the government needs to take bolder strides in addressing occupational fraud in the public sector in order to remedy the poor image created over the years by employee fraud.
On a global scale, occupational fraud is expected to rise as fraudulent employees keep devising new schemes to circumvent employers innovations aimed at arresting the trend (Hollman et al., 2007). Therefore, the Nigerian government as a matter of urgency should improve its employment processes in order to stay ahead of potential fraudsters. Many approaches such as installing an effective internal control mechanism among others are steps in the right direction but this paper advocates pre-employment screening of all would-be public sector employees in Nigeria while gradually phasing out the old employees through transfers and retirement.
Currently, evidence of pre-employment screening in the public sector is limited to surface checking of qualifications and employment is mostly based on of ethnicity, religion or political affiliation (who you know) without other checks on integrity (Gberevbie, 2009). Pre-employment screening has potentials of weeding out fraud prone persons before they have opportunity to hatch their cruel schemes. Also, some private sector firms in developed countries have used pre-employment screening to protect their organisations against occupational fraud (Sims, 2004). Therefore, pre-employment screening (background checks) can benefit the public sector and should cut across all ministries, educational institutions, health, the armed forces and other sectors of the Nigerian economy. In essence, failing to carry out pre-employment screening is ‘an open invitation to fraud’ (Courtenay, 1998).
PRE-EMPLOYMENT SCREENING PROCESS
It involves an investigation of all information supplied by a job seeker. Information supplied could be verbal or as complied in the submitted curriculum vitae (CV). Verification can be carried out either prior to or after selection and the main purpose is to give insight into the type of person the organisation is dealing with. It is also intended to streamline the selection process so that efforts could be channeled to more suitable candidates. Pre-employment screening also called background check includes a reference check, employment history check, educational and professional certificate checks, criminal record check and media check (AESC, 2006; Shepard & Duston,1998).
Most job seekers post very bogus claims about themselves on their CVs to capture the attention of potential employers. However, Griffith, Chmielowski and Yoshita (2007) and Brody (2010) find that applicants fake information on their resume in order to increase their chances of being hired. Educational and professional certificates should be thoroughly verified by contacting the institutions listed on the resume. This is particularly important because we emphasise too much of paper qualifications and many job seekers have found a way of obtaining cloned certificates. Merwe (2005) revealed that 24 percent of all job applicants carry ‘fake identity documents’ which belong to other people or are cloned. Also, age could be verified by working backwards to see when the applicant started nursery or primary school and you will be amazed at your discoveries.
Therefore, the government must verify all information supplied on CVs and should show zero tolerance for any act of deception.
Brody (2010) stressed that media search can be conducted to have an insight on the would-be employee, especially on how he/she has appeared in the press either in his personal, philanthropic or professional life. This check provides useful information on how previous organisations were managed in terms of financial health and business reputation during the would-be employees’ tenure. This is particularly useful for Nigeria in the selection and appointment of top public officials. Only those with impeccable reputation should be hired.
A search on person’s credit history gives insight to how financially responsible he is. An illiquid or insolvent individual is more prone to fraudulent schemes to meet his needs when employed and so this search highlights the life style of would-be employees (Brody, 2010). The ACFE (2012) report found a link between a lavish lifestyle and incentive to steal. Hence, excessive financial pressure is sure temptation to steal. The banks would be useful in providing information on the credit history however, the lack of a comprehensive database of all Nigerians could impede this process.
The referees on would-be employees’ CVs need to be checked. Although Brody (2010) showed that most referees may be unwilling to give unfavourable reports to questions from employers. However, organisations must check the references because some referees are ignorant of being listed as referees in a CV. They may not even know the persons listing them as referees. Also, referee reports should be verified by contacting the writer as such reports could be forged in order to gain advantage. In addition, past employers should be contacted to report on their experience with the particular job applicant and valuable information could be gathered in the process.
It is important to check the criminal history of a would-be employee to ensure that an ex-convict is not hired. Ignoring criminal history can spell trouble for an organisation that may discover too late that the fraudster was an ex-convict (Brody, 2010). Unfortunately, Nigeria has underutilised her capacity to account for all individuals within its territory. Little wonder you find persons dismissed for wrong doing receiving accolades for smartness from colleagues (Osisioma, 2012) and even finding new jobs.
Furthermore, in developed countries where accurate records of citizens are kept, a person’s driving record can tell a lot about him. An applicant’s honesty could be verified by getting information on matters relating to any violations of traffic and safety laws, suspension and revocations. It can also provide information on alcohol and drug abuse (Brody, 2010). Again, Nigeria is yet to have a comprehensive database for all persons driving within its territory. You hardly find instances of revocation of licenses for traffic offences .
In event of incomplete and inaccessible past records of applicants , Wiley and Rudley (1991) advocates the use of honesty test. Honesty test are psychological tests designed to identify job applicants tendencies toward workplace counterproductive behaviours like occupational fraud amongst others.
Another technique available though not yet scientifically proven is graphology (handwriting analysis). Graphology is still considered contentious as scholars are yet to agree on its efficacy. The technique assumes that a person’s personality can be revealed through his handwriting and this can assist in weeding out fraudsters or questionable persons (Brody, 2010).
Ensuring that people are hired is a necessity for continuity of the Nigerian public sector. However, current employment and placement of persons in the Nigerian public sector on the basis of ethnicity, religion or political affiliation has not done any good for the country. Pre-employment screening (if any) is rarely carried out to ensure that only persons with good moral standing are employed. The fight against corruption in the Nigerian public sector may get tougher if measures to employ the right persons are not explored by the government. The image of an organisation or country is mirrored in the behaviour exhibited by its employees or citizens. Finally, an employee selection process that incorporates an effective screening mechanism remains a formidable initial defense against occupational fraud.
Courtesy: THE NIGERIAN ACCOUNTANT (ICAN).
ALL RIGHTS RESERVED. CONTACT US FOR A COPY
The state of Nigerians have in
recent time deteriorated in terms of the standard of living of the citizens.
This article is cycled around what is perceived as a Conspiracy between
the Government and the Private Sector to make life miserable for Nigerians by intentionally bringing poverty upon them especially the
productive age through a
systematically structured platform to make sure that the youth of this nation never get to see the light of the day.
Unemployment is a global issue and not peculiar to Nigeria alone but the case of Nigeria has become that which is described as ” The bad state of a community is to the benefit of the elites“. The
Government has constantly
Expressed it’s awareness of the steadily increasing state of
unemployment in Nigeria thus
leading to almost all political office holders using statement like ” the
teaming unemployed youth” even though most of them do not know the meaning; but the copy-copy syndrome at work, and even the minister of finance said that the unemployment in Nigeria is giving her sleepless nights ( sure? Who do we ask) and the president have equally made several statements regarding unemployment in Nigeria, but the question is, are they really doing anything about it? NO,
NO and NO, they brought out one lottery program in the name of YOUWIN and another they call SURE- P, ( is this how unemployment is going to be tackled in Nigeria?), the worst of it is that when the president or the minister of finance is been asked about their efforts
towards reducing unemployment, they will quickly refer to YOUWIN!,
but the BIG question is: what is the cause of the increasing
unemployment in Nigeria?.
There are many of them but let me emphasize on three(3) :
(1). Over taxation of the SMEs
(2). Heavy, Heavy, over Heavy
GREED of the private Sectors
(3). The cost of running Nigeria Government.
(1). OVER TAXATION OF THE SME’s:
All over the World SME is what
boosts the economy but here in Nigeria, Government at local and state level have sworn not to give SME breathing space, they impose
multiple and over taxation on the SME’s and introduces several unreasonable levies with steady molestation and harassment by touts and thugs who make lots of
money for them on a daily basis and yet these Governments still complain of lack of funds for development. This over taxation has kept many many SMEs out of business.
(2). HEAVY, HEAVY and EXCESSIVE HEAVY GREED of the private Sectors:
As a matter of fact greed is an understatement here, this is were the Conspiracy and slavery comes in, the Government has been
empowered to regulate the
activities of the private Sector but Nigerian Government have turned blind eyes to the greedy activities of the private Sector, one of which is the free hand given to them to turn
Nigerians into slaves by operating their so called OUTSOURCING/ IN-
SOURCING CONTRACTS JOBS.
There are two types of companies:
OPPORTUNITY CREATING COMPANIES
AND OPPORTUNITY SAPPING
These outsource-rs and insource-rs do not create opportunities rather they go about looking for where opportunities have been created to take advantage in the name of supplying labor, and in turn use it as a medium to enrich themselves and impoverishing/ enslaving their
supposed workers. For instance the client pays a hundred thousand naira (#100,000) per worker through these contractors then the contractors pay these workers
twenty thousand naira (#20,000) that is if you are lucky enough to get up to that amount and with a threat of take it or leave the job after all there are a thousand and one persons begging to get the
same job since job security is not there. Before this outsourcing issue was said to be for casual jobs but right now its spreading all through
and one day we might wake up to hear that the office of the president of Nigeria has been outsourced, YES because the people involved in this modern slavery called
OUTSOURCING are powerful that even those who have AN
OPPORTUNITY CREATING COMPANIES are closing it down in preference to AN OPPORTUNITY SAPPING
COMPANIES because of the Heavy progress and success these OUTSOURCE-RS have enjoyed at the expense of the Nigerian workforce.
Researches made shows that other countries of the World are in serious regulation of the outsource-rs to avoid evil deeds but over here in Nigeria they are given all the support they need which has widen
the gap between the rich and the poor because the poor takes nothing home while the rich that home large part of not one, not two but many poor workers salary in the name of OUTSOURCING/ IN-
SOURCING, CONTRACT STAFF.
(3). The cost of running
Government in Nigeria: The primary aim of setting up Government is to help reduce the problem of the subjects but over here in Nigeria,
Government has become our
biggest problem, elect or appoint someone in a position today the next minute he will give the wife one illegal office called office of the first lady, some even go as far as having office of the mother of the governor, all just for the hunger for “POWER” and there are so many other offices that are not supported by the constitution, yet Government
sponsors these offices and their activities and even most of the legal offices in Nigeria have used their position to legalize outrageous pays in the name of ALLOWANCES
yet same people will cry in front of cameras ” OHHH!!! WE NEED TO PROVIDE JOBS FOR THE TEAMING UNEMPLOYED YOUTH” with which fund? If i may ask.
To all Nigerians this article is meant to give a clue to our Government towards reducing unemployment in the nation and saving the lives of it’s citizens from unnecessary
hunger and keeping them out of social vices like Terrorism,
Kidnapping, Arm robbery, Yahoo-yahoo, illegal migration to other countries ( and subsequently ending in jails) and saving Nigerians from this foreseen slavery by the corner but if the Government refuses to take action within the shortest time, maybe Nigerians, just maybe it’s time . Help Spread this message.
Eat your Water
According to the old rule of thumb, you’re supposed to drink eight glasses of water per day (and some experts recommend even more). That can seem like a daunting task on some days, but here’s the catch: You don’t have to drink all that water. Roughly 20% of our daily H2O intake comes from solid foods, especially fruits and vegetables.
It’s still important to drink plenty of water—especially in the summertime—but you can also quench your thirst with these 15 hugely hydrating foods, all of which are at least 90% water by weight.
Water content: 96.7%
This summer veggie—which has the highest water content of any solid food —is perfect in salads, or sliced up and served with some hummus, says Keri Gans, RD, author of The Small Change Diet: 10 Steps to a Thinner and Healthier You and a consultant to Mindbloom, a technology company that makes life-improvement apps.
Want to pump up cucumber’s hydrating power even more? Try blending it with nonfat yogurt, mint, and ice cubes to make cucumber soup. “Soup is always hydrating, but you may not want to eat something hot in the summertime,” Gans says. “Chilled cucumber soup, on the other hand, is so refreshing and delicious any time of year
Water content: 95.6%
Iceberg lettuce tends to get a bad rap, nutrition-wise. Health experts often recommend shunning it in favor of darker greens like spinach or romaine lettuce , which contain higher amounts of fiber and nutrients such as folate and vitamin K. It’s a different story when it comes to water content, though: Crispy iceberg has the highest of any lettuce, followed by butterhead, green leaf, and romaine varieties.
So when the temperature rises, pile iceberg onto sandwiches or use it as a bed for a healthy chicken salad. Even better: Ditch the tortillas and hamburger buns and use iceberg leaves as a wrap for tacos and burgers.
Water content: 95.4%
That urban legend about celery having negative calories isn’t quite true, but it’s pretty close. Like all foods that are high in water, celery has very few calories—just 6 calories per stalk. And its one-two punch of fiber and water helps to fill you up and curb your appetite.
This lightweight veggie isn’t short on nutrition, however. Celery contains folate and vitamins A, C, and K. And thanks in part to its high water content, celery neutralizes stomach acid and is often recommended as a natural remedy for heartburn and acid reflux.
Water content: 95.3%
These refreshing root vegetables should be a fixture in your spring and summer salads. They provide a burst of spicy-sweet flavor—and color!—in a small package, and more importantly they’re filled with antioxidants such as catechin (also found in green tea).
A crunchy texture also makes radishes a perfect addition to healthy summer coleslaw—no mayo required. Slice them up with shredded cabbage and carrots, sliced snow peas, and chopped hazelnuts and parsley, and toss with poppy seeds, lemon juice, olive oil, salt, and pepper.
Water content: 94.5%
Sliced and diced tomatoes will always be a mainstay of salads, sauces, and sandwiches, but don’t forget about sweet cherry and grape varieties, which make an excellent hydrating snack, Gans says. “They’re great to just pop in your mouth, maybe with some nuts or some low-sodium cheese,” she says. “You get this great explosion of flavor when you bite into them.”
Having friends over? Skewer grape tomatoes, basil leaves, and small chunks of mozzarella on toothpicks for a quick and easy appetizer.
Water content: 93.9%
Bell peppers of all shades have a high water content, but green peppers lead the pack, just edging out the red and yellow varieties (which are about 92% water). And contrary to popular belief, green peppers contain just as many antioxidants as their slightly sweeter siblings.
Peppers are a great pre-dinner or late-night snack, Gans says. “We tell people to munch on veggies when they have a craving, but a lot of people get bored of carrots and celery pretty quickly,” she says. “Peppers are great to slice up when you get home from work, while you’re making or waiting for dinner.”
Water content: 92.1%
Don’t let cauliflower’s pale complexion fool you: In addition to having lots of water, these unassuming florets are packed with vitamins and phytonutrients that have been shown to help lower cholesterol and fight cancer, including breast cancer. (A 2012 study of breast cancer patients by Vanderbilt University researchers found that eating cruciferous veggies like cauliflower was associated with a lower risk of dying from the disease or seeing a recurrence.)
“Break them up and add them to a salad for a satisfying crunch,” Gans suggests. “You can even skip the croutons!”.
TO BE CONTINUE……..