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New partnership to fight corporate fraud

Ross O. Storey | Feb. 10, 2010
MIS Asia editor Ross O. Storey asked Global Compliance CEO, Jim Burke, how important it was for Asia enterprises to have compliance management solutions in place and what risks they faced if they dont.

Why do you think it is that APAC registers the highest levels of global corporate fraud? What specific conditions prevail in Asia that encourage this, as compared to the US and Europe?

Whistleblowing in Asia-Pacific is not as common culturally as in countries like the US, and levels of adoption vary by region.  Our current international clients, however, are increasingly active in reporting issues from the region, especially when we create the right environment through senior management sponsorship and internal employee awareness campaigns.  We expect that recent news and coverage of fraud and corruption will create a surge of whistleblowing by individuals to report such practices or violations.

Reporting from Asian based suppliers to US companies is increasing based on a higher level of understanding via Codes of Ethics/Conduct and awareness campaigns. We believe that over time, governments and business leaders will play a key role here for these programs to truly take effect.  

Our solutions today take that integrated approach to whistleblowing by engaging at the very top of an organization.  Additionally, the culture for reporting over the web or through handhelds, like cell phones, will catch on rapidly in this market given the pervasiveness of such channels and the higher comfort with typing versus speaking live to a person or recording messages over the phone.  We have also learned over time, and through experience, that web based allegations have substantiation rates consistent with phone based allegations.   

What is a typical instance of corporate fraud that has been suffered in the Asia Pacific Region (no names)?

According to a recent Kroll Global Fraud Report, the average percentage of companies experiencing fraud is 84 per cent - and as high as 96 per cent in China. The average financial loss is over $6 million US dollars and the areas cited most frequently for loss have to do with information theft, corruption and briber and the theft of physical assets.

What is the corporate fraud environment in specific Asia countries Singapore, Malaysia, Hong Kong, Thailand, Indonesia, the Philippines and how do they rank? Which is the worst and which is the best?

Corporate Fraud is a real risk in every country in the world but unfortunately an accurate country by country breakdown/comparison is not available. General Asia Pacific data contained in the 2009 Kroll Report ( ) indicates that the level of fraud in Asia Pacific has been relatively flat in the last year (84 per cent reporting a fraud in the last 3 years as against 88 per cent in the 2008 report).  However the report indicated a 50 per cent jump in the number of companies who consider themselves 'highly vulnerable to corruption and bribery". This is one of the major risks to any business operating in this region and extends to the business practices of its entire supply chain including vendors, suppliers and sales agents.


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