The survey finds that bribery and corrupt practices are prevalent in Malaysia. Thirty-nine percent of respondents say that bribery or corrupt practices happen widely in the country, which is nearly double the Asia-Pacific average of 21 percent.
In addition, 29 percent of respondents say that bribery or corrupt practices have increased due to tough economic times and increased competition, which is the third highest amongst the countries surveyed.
In contrast, respondents are satisfied with their companies' ABAC policy, with 55 percent indicating that it as relevant and effective. This clearly shows even though policies are in place and are perceived acceptable, they are not enforced effectively as fraud, bribery and corruption activities continue to be common practice.
According to the survey results, companies in Malaysia have a strong reliance on the established methods to detect fraud, with 51 percent of those polled say that internal audit is the best way to proactively detect fraud; second highest among the countries surveyed.
However, 21 percent of respondents indicate they are not confident with the company's existing internal procedures to detect fraud. Only a small portion of those polled considers tools other than the established methods. For example, only 12 percent of the respondents said that the use of technology, such as forensic technology, is a good method of detecting fraud.
A large proportion of companies in Malaysia have whistle-blowing schemes in place, with over 77 percent of those polled indicate having a whistle-blowing hotline in their companies, which is the highest amongst the Asia-Pacific markets surveyed. However, our respondents expressed concerns over the use of whistle-blowing schemes.
The top concerns are the lack of independence of the person receiving the complaints and the fear that reporting unethical behaviours would have a negative impact on their career. With laws against bribery and money laundering, as well as the Whistleblower Protection Act, there is an expectation to see improvements as Malaysia facilitates protected disclosures and shields for whistleblowers against retaliatory action from employers through criminal sanctions.
Companies could benefit from a well-instituted scheme governed by clear rules and protections, and raise the awareness of the existence of whistle-blowing schemes.
"The role of whistleblowers in the fight against corporate fraud is becoming more apparent and key to curbing corruption. The Whistleblower Protection Act will enable whistleblowers to be protected and we expect that more will come forward to raise issues relating to corruption, misconduct, breach of trust and irregular activities," said EY Fraud Investigation & Dispute Services Partner of Malaysia, Joyce Lim.
A copy of the survey report can be downloaded here.
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