Fraud and corruption can manifest in many different ways, vary greatly from organization to organization and potentially result in widespread consequences for corporations globally.
At an event jointly organized by the Association of Chartered Certified Accountants and the Institute of Internal Auditors Singapore, panelists agreed that global businesses operating in higher risk markets must instil effective anti-corruption programs to deter the risks of wrongdoings.
An upcoming KPMG report suggests that over one in four Singapore companies are victims of fraud.
Therefore, it is essential that companies take appropriate measures to set up internal controls and processes to reduce the likelihood of fraud and corruption occurring.
"Chief financial officers must play a significant part in ensuring these frameworks are adhered to strictly," says Leong Soo Yee, Head of ACCA Singapore.
Leong notes that the costs associated with setting up and monitoring of these controls should not be of concern as they will be significantly lower than the damage done to the organisations’ reputation and the amounts that may be paid to settle any claims that arise from fraudulent activity.
"The process of reducing fraud starts with a corporation’s management team. They must set the right tone for the rest of the organisation to follow," adds Leong.
Owen Hawkes, a Forensic Partner at KPMG in Singapore, stresses that companies need to recognize the potential issues and carry out a risk assessment process tailored to the organization’s businesses activities and environment.
They also need to implement a framework to help prevent, detect and respond to such financial crimes.
“The other essential is that any attempt to manage risk must start with the people of an organisation," says Hawkes.
Hawkes went on to say that people are simultaneously the biggest risk and the best advantage companies have when it comes to fraud and corruption.
"A company’s staff needs to be educated about the organisation’s ethical environment, the risks that it faces, and their role in addressing those risks,” Hawkes adds.