Media Resource Bulletin — Fraud at Prudential: A Lesson in Internal Controls

Business Wire, August 18, 1997

ALTAMONTE SPRINGS, Fla.--(BUSINESS WIRE)--Aug. 18, 1997--The Prudential Insurance Co. of America fraud case underscores the need for powerful organization-wide internal controls and the necessity of prompt and effective corrective action says The Institute of Internal Auditors (IIA), a 60,000-member international professional group based near Orlando, Fla.

"Strong internal controls provide reasonable assurance against unethical behavior and minimize exposure to fraud. I cannot, however, over-emphasize the importance of an ethical corporate environment established and maintained by the tone at the top," said IIA President William Bishop III. "And when the audit report indicates something is amiss, it is imperative that management take prompt corrective action. Also, powerful new techniques such as control self-assessment can be seamlessly implemented to broaden the capacity of the risk management/internal control system."

The IIA is part of the Committee of Sponsoring Organizations (COSO) which has developed an internal controls framework which serves as a guide for:

Establishing an ethical work environment.

Identifying potential fraud risks and taking action to

manage them.

Continuously monitoring both the organization's operations

and the policies and procedures it has in place to safeguard

against fraud.

To obtain more information on the COSO framework, or to arrange an interview on effective fraud prevention strategies with IIA President William Bishop III, or an IIA member in your city, contact Trish Harris at 407/830-7600, Ext. 227.

Established in 1941, The Institute of Internal Auditors is an international professional association with world headquarters in Altamonte Springs. The IIA has more than 60,000 members in internal auditing, governance and internal control, IT audit, education and security. With representation from more than 100 countries, The Institute is the acknowledged leaders in research, education, technology, and certification for the profession worldwide. -0-

NOTE TO EDITORS: In the Internet/email address noted in this news release, there is an "at" symbol between tharris and theiia.org. In the World Wide Web address noted, there is a double slash between http: and www.theiia.org. These symbols may not appear properly in some systems.

CONTACT: The Institute of Internal Auditors

Trish W. Harris, Manager of Marketing & PR

Tel: 407/830-7600, ext. 227 -- Fax: 407/831-5171

E-mail: tharris@theiia.org

Web site: http://www.theiia.org