Managing Conflict of Interest - Organisation for Economic Co ...

Codes of Conduct in the Private Sector 167Figure 2: Who Detects FraudSource: Association of Certified Fraud Examiners (ACFE), 2004.the base of the triangle feed the supply of motivated offendersat the apex. Perceived opportunity arises when favorable circumstancesexist, e.g., there is an absence of controls, or managementis able to override controls. Management or other employees mayhave an incentive or be under pressure, and thus motivated to commitfraud. And those involved in a fraud are invariably those whocan rationalize a fraudulent act as being consistent with their personalcode of ethics. Some individuals possess an attitude or personalitycharacteristic that allows them to make a value judgmentto knowingly and intentionally commit a dishonest act. Thus, toprevent fraud, it is necessary to reduce the opportunities for fraudand educate the public on ethics to ultimately reduce the supply ofmotivated offenders.Pakistan’s ExperiencePakistan’s Regulatory FrameworkThe corporate regulatory framework in Pakistan is guided bythree key entities—the Securities and Exchange Commission ofPakistan (SECP), which regulates all corporate entities and administerscorporate laws; the State Bank of Pakistan, which regulatesADB/OECD Anti-Corruption Initiative for Asia and the Pacific