Financial Fraud may be a form of Consensus Communication

Financial fraud is a serious act that is not to be taken lightly by managers of an organization. My main goal is to communicate the risk associated with financial fraud to managers. However, this is not my only goal. I also hope to explain to my audience that in order for financial fraud to be prevented, managers need to communicate and work effectively with each other. They must come to a decision on the level of risk associated with financial fraud in their company, and manage this risk accordingly. Because it requires that managers, and possibly employees, work together to decide on how to manage this risk, I have decided that my topic best fits in with consensus communication.

Financial communication must have a strong information flow in order to be accurate. If there are barriers preventing this flow of information (such as bad employee ethics, or poor verification of financial reports) then the consequences could be disastrous. First, the audience must be aware of their company’s present situation. The financial information flows between accountants, the Chief Financial Officer, and the Chief Executive Officer. By establishing trust within individuals in an organization during this flow of financial information, it could greatly reduce a company’s financial miscommunication risks.

Due to previous financial fraud scandals, such as the Enron scandal, most company managers should be well aware of the effects these scandals had on companies. Therefore, my audience is currently well informed of the risks associated with financial fraud. Now, I need to help them analyze the risk associated with their company, and how to lessen the risk of fraudulent financial scandals in the future. My audience would most likely consist of highly educated officials because they are individuals capable of managing a business. The audience should also have great confidence with me. This is because I have done extensive research on the available options that managers have to use to lessen the risk of financial fraud. I have presented them with possible financial fraud reducing options in my Fact Sheet, along with ways to receive more information about these solutions.

One thing I observed is how the book we use for class, Risk Communication, identifies that there is no real useful source to aid my communication efforts. In Table 8-4, it identifies that the risk communicator must make direct contact with the audience in order to successfully inform and persuade them. I completely agree with this. While there is a history to fraud scandals, the best method to reduce the risk of financial fraud in a company is to present available resources, and have the company managers decide the best course of action to reduce their risk. I will need to motivate them, and possibly change their behaviors towards the situation. Financial fraud needs to be recognized as an act with serious consequences. By presenting this risk effectively as form of consensus communication, I feel that I can better convince my audience.

-MAH