ANNUAL REVIEW

Corporate Fraud & Corruption 2014

June 2014  |  FRAUD & CORRUPTION

financierworldwide.com


Click cover to download

(Subscriber-only password access)

 

Not a subscriber?

Click here to join the FREE mailing list and receive password access


Corrupt and fraudulent behaviour remains a pressing issue for businesses worldwide, with global authorities continuing to crack down on wrongdoing.

 

UNITED STATES

Randall Wilson

RGL Forensics

“One of the steps I have noticed is that the internal audit groups of corporations are proactively and aggressively investigating any aberrations in the financial results. For example, we have seen instances in which these departments are identifying anomalies such as excessive shrinkage in the inventory, accounts that do not reconcile, excessive voids, or missing sequentially numbered check numbers or invoices, and then investigating aggressively to determine whether there is fraud occurring. In some cases, these corporations are retaining forensic accounting firms to assist their internal auditors in these investigations.”

 

CANADA

Adam Fanaki

Davies Ward Phillips & Vineberg LLP

“In view of the significant penalties for companies and individuals, and the reputational impact and debarment from bidding on any federal government contacts, Canadian companies are actively implementing anti-corruption compliance programs, as well as protocols for investigating potential instances of wrongdoing and protections for whistleblowers. While Canada’s foreign corruption regime was criticised in the past by international organisations, the federal government has updated its legislation and the issue is now clearly an enforcement priority.”

 

ARGENTINA

Pedro Serrano-Espelta

Marval, O’Farrell & Mairal

“In our experience, companies in Argentina can be divided into three tiers. In the highest tier we see mostly companies that have been subject to FCPA investigations. The boards and senior executives of these companies are very aware of the role that anti-corruption compliance has for the success of their business, and they pay high attention to developing compliance programs that are effective and can withstand any serious investigation.”

 

UNITED KINGDOM

Neil Swift

Peters & Peters Solicitors LLP

“Corporate entities face two principal areas of fraud and corruption risk – where the company itself is the victim and suffers economic loss, and where the company faces potential civil, regulatory or criminal liability, arising from the actions of its officers and employees. Large domestic and multinational companies have long recognised the need to implement controls to address these risks, particularly where a corporate is exposed to other regulatory regimes.”

 

GERMANY

Claudia Nestler

PwC

“We have seen significant progress from corporates in fighting fraud and corruption. Every two years we conduct a survey looking at the developments in Economic Crime and Corporate Culture in Germany – 2013’s survey showed that today approximately three quarters of all corporates have implemented a compliance program or an anti-fraud management system to mitigate the risks of economic crime. This development is mainly driven by large-sized companies.”

 

RUSSIA

Maxim Kulkov

Freshfields Bruckhaus Deringer

“Because, in the last few years, the Russian economy has been increasing transparency and openness for foreign investment, I have noticed that companies operating in Russia have been increasing their efforts to reduce the potential for corporate fraud and corruption, and keep the respective risks under control. Quite logically, their boards and senior executives play a key role in this process.”

 

AUSTRIA

Karin Mair

Deloitte Forensic Austria

“From my experience, steps to reduce fraud and corruption are often taken as a response to an incident of misdemeanour within a company. After a fraud or corruption case necessitating a forensic investigation and involving potential operational and reputational loss or risks, companies re-evaluate their existing internal regulations and start to take proactive steps for the future. Independently of this observation, a clear tendency to increase compliance activities within companies can be noted.”

 

SWITZERLAND

Oliver M. Kunz

Walder Wyss

“Several corruption scandals have recently made headlines in Switzerland. This resulted in increased public awareness of such crimes. As a result, preventing fraud and corruption has become an increasing concern of boards and senior executives, and they are much more likely to take proactive steps than in the past to reduce their own and the company’s exposure. While a lot of companies have implemented anti-corruption guidelines in the past few years, only a few have actively and thoroughly examined their own vulnerabilities with regard to their employees.”

 

CZECH REPUBLIC

Tomáš Kafka

Ernst & Young Audit, s.r.o.

“The amount of effort put by executives into anti-corruption initiatives depends on the industry and the ownership structure of the company. Local companies are more willing to engage with corruption and have pushed multinationals out of the market in some industry sectors. Multinational companies subject to strongly enforced anti-corruption legislation, such as the FCPA or UK Bribery Act, are focused on implementing compliance measures and monitoring their effectiveness, while asset misappropriation or misstatement fraud has gone slightly off their radar, even though the prerequisites for them exist in these tough economic times.”

 

CHINA & HONG KONG

Peter Yuen

Fangda Partners

“China’s Central Commission for Discipline Inspection (CCDI) recently released the report, Using ‘Zero Tolerance’ to Look at the Current Atmosphere of ‘Fighting Tigers.’ According to the report, the current anti-corruption campaign has three features – “the Central Committee attaches great importance to it,” “the common people pay close attention to it,” and “corrupt officials are extremely nervous” about it. This report fully displays the current leadership’s determination to fight corruption, which is rarely seen – if ever – in China.”

 

NEW ZEALAND

Ian Gault

Bell Gully

“New Zealand is widely-regarded as a relatively low-fraud economy, so boards and companies often do not consider it necessary to take extensive proactive steps. In practice, many anti-fraud measures are adopted in order to satisfy legislative and regulatory requirements. Nevertheless, there are some indications that fraud and corruption – including foreign bribery – are on the rise.”


CONTRIBUTORS

Bell Gully

Davies Ward Phillips & Vineberg LLP

Deloitte Forensic Austria

Ernst & Young Audit, s.r.o.

Fangda Partners

Freshfields Bruckhaus Deringer

Marval, O’Farrell & Mairal

Peters & Peters Solicitors LLP

PwC

RGL Forensics

Walder Wyss


©2001-2016 Financier Worldwide Ltd. All rights reserved.