2013 Asia-Pacific Fraud Survey

Prevention and detection tools

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Using technology to detect fraud, bribery and corruption

78% of respondents agreed that the use of technology to examine all transactions across the company would result in better fraud detection and more effective prevention of corruption.

Especially for rapidly expanding organizations, the use of technology for forensic data analytics enables companies to transform a large volume of transactional data into valuable business intelligence within a short period of time. It also assists internal audit and compliance teams to focus on potentially anomalous transactions and enhance their focus of reviews in times where costs are being heavily scrutinized.

EY - best ways to proactively detect fraud

Whistleblowing schemes

Companies may place an over-reliance on their internal procedures while overlooking the role of whistleblowing schemes that provide channels for employees to discreetly report unethical behavior.

Our Asia-Pacific Fraud Survey noted that only 32% of respondents, compared with 53% in our Global Fraud Survey, reported their companies having a whistleblowing scheme, whereas 81% of respondents said that they would be prepared to use this procedure. This suggests a disconnect between the availability of whistleblowing schemes as a means to prevent fraud and employees’ ease of access and willingness to use the scheme in practice.

A large difference in the attitudes toward the actual use of whistleblowing schemes can also be found across Asia-Pacific.

Besides, we note that very often companies do not have the latest investigative procedures or enforcement actions in following up whistleblower reports. The lack of a clear follow-up course of action could deter an employee from reporting an unethical act.

Regulations and enforcement

A robust regulatory framework, the rule of law, government effectiveness, a culture of compliance and an effective judicial system: things that many companies in the West take for granted; yet in Asia-Pacific, some of these elements are absent.

26% of respondents believed that government efforts against bribery are working, however, companies still want governments to do more.

Increasingly there is an acceptance that enforcing regulation is not perceived to slow down economic growth. This perception has changed over the last few years as companies have come to realize that the cost of regulation is less than the financial impact of fraud, bribery and corruption.

Potential fines from regulators and reputational damage stemming from a fraud or bribery investigation are generally seen to be far more expensive than implementing an effective anti-fraud and bribery program.

As the global economy becomes more interdependent, companies continue to expand their geographical presence and face a daunting task of staying in compliance with a multitude of local rules and regulations. In the wake of the financial crisis, those regulations appear to be growing as their enforcement becomes more aggressive and extra-territorial as well.