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Supervisory body

The supervisory body of an organisation, such as the Supervisory Board or the Board of Trustees. The term governance body refers to the supervisory body of an organisation, regardless of its actual designation. In practice, there are other types of body that either have a different role or are formalised differently or not at all. For example, the Advisory Board, which is not a (formal) supervisory body but has an advisory or sounding board function, the shareholders or a selection thereof (e.g. board members of a trust office foundation) or other types. Putting together recommendations for these rather different bodies…

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Reporting obligation

The obligation under laws or regulations to report an event, a transaction or possibly relevant non-compliance with laws and regulations to a specific authority. This also includes drawing up an internal report or issuing an alert if a specific situation arises, based on a code of conduct.…

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Privacy law

Article 10 of the Constitution provides for the right to privacy: ‘Everyone has the right to respect for his privacy, subject to limitations imposed by or pursuant to the law.’ Other legislation contains rules about what can and cannot be done in the context of privacy. The most important one is the General Data Protection Regulation (Algemene Verordening Gegevensbescherming/AVG), which is in force throughout the EU and applies to all organisations that record the personal data of customers, staff or other people in the EU. In the Netherlands, the Data Protection Authority (Autoriteit Persoonsgegevens/AP) supervises compliance with the legal rules…

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Internal control set-up

Comprises the complete set of control measures to ensure achievement of the (strategic) objectives set by the organisation, within the defined preconditions such as cost levels, and observance of the agreements in effect and the valid procedures (compliance). The internal control set-up comprises: (a) the internal control system itself: what control measures are in place to manage the organisation as a whole? (b) the content of the control system: the quality of the various control measures that are intended to guarantee that objectives and standards are achieved.…

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Internal code of conduct

An internal code of conduct clarifies what is expected of everyone in the organisation, what can be expected of the organisation and what behaviour is and is not accepted. If the standards and values are clear to everyone, discussions are avoided and this clarity contributes to a better working atmosphere. An internal code of conduct can never make provision for every conceivable situation, so it calls for responsible, confidential, transparent, fair and impartial action on the part of employees. Integrity only really becomes tangible in daily practice and in the conversations you have with each other about it.…

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Internal auditor

A natural person, often also an accountant, who is employed by the organisation and professionally assesses the extent to which his organisation succeeds in controlling the business process and the associated risks. The internal auditor helps an organisation achieve its goals by evaluating and improving the effectiveness of the governance, risk management and control processes based on a systematic and disciplined approach.…

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Fraud triangle

A theory developed by the criminologist Donald Cressey (1953), which assumes that fraud requires three elements: pressure, opportunity and rationalisation. A fraudster experiences pressure or is motivated to commit fraud, considers himself capable of committing fraud based on the authorities of his position (opportunity) and justifies his intended fraud to himself (rationalisation).…

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Fraud risk management

The internal control measures should be appropriate within the organisation and effective in preventing and detecting the fraud risks identified via the fraud risk assessment in a timely manner. The primary responsibility for the prevention and timely detection of fraud rests with the organisation’s supervisory body and board. The board, under the oversight of the supervisory body, must imperatively assign a high importance to preventing fraud, as this reduces the opportunities for committing fraud, and also discourages it, acting as a deterrent that makes individuals think twice about committing fraud because of the likelihood of detection and punishment.…

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