Anti fraud framework

 

If a fraud were to happen, are you likely to prevent or detect it?

The impact of fraud, internal or external, has been a concern since trading started. People continue to commit fraud when they see an opportunity, and have either an incentive or pressure that drives them, and are able to rationalize their behavior. 

 

In 2016 PwC Global Economic Crime Survey:
  • 36% of the 6,337 respondents across 115 countries claimed to have experienced an economic crime within the previous year;
  • Gap between internal and external fraud actor is closing. 1 in 5 respondents have never carried out a fraud risk assessment;
  • Cybercrime climbs to 2nd most reported economic crime affecting 32% of organizations. Most companies are still not adequately prepared for – or even understand the risks faced: Only 37% of organizations have a cyber-incident response plan;
  • 1 in 5 respondents are not aware of the existence of a formal ethics and compliance program and many are confused about who owns it internally.
  • Almost half the incidents of serious economic crimes were perpetrated by internal parties;
  • 1 in 5 banks have experienced enforcement actions by a regulator – failure to curb illicit business practices may lead to personal liability;
  • More than a quarter of financial services firms have not conducted Anti-money Laundering (AML)/ Combatting the Financing of Terrorism (CFT) risk assessments across their global footprint; and
  • Data quality cited by 33% of respondents as a significant technical challenge. Lack of experienced AML/CFT staff is a major issue.

 

If a fraud were to happen, are you likely to prevent or detect it?

The impact of fraud, internal or external, has been a concern since trading started. People continue to commit fraud when they see an opportunity, and have either an incentive or pressure that drives them, and are able to rationalize their behavior. 

 

In 2016 PwC Global Economic Crime Survey:
  • 36% of the 6,337 respondents across 115 countries claimed to have experienced an economic crime within the previous year;
  • Gap between internal and external fraud actor is closing. 1 in 5 respondents have never carried out a fraud risk assessment;
  • Cybercrime climbs to 2nd most reported economic crime affecting 32% of organizations. Most companies are still not adequately prepared for – or even understand the risks faced: Only 37% of organizations have a cyber-incident response plan;
  • 1 in 5 respondents are not aware of the existence of a formal ethics and compliance program and many are confused about who owns it internally.
  • Almost half the incidents of serious economic crimes were perpetrated by internal parties;
  • 1 in 5 banks have experienced enforcement actions by a regulator – failure to curb illicit business practices may lead to personal liability;
  • More than a quarter of financial services firms have not conducted Anti-money Laundering (AML)/ Combatting the Financing of Terrorism (CFT) risk assessments across their global footprint; and
  • Data quality cited by 33% of respondents as a significant technical challenge. Lack of experienced AML/CFT staff is a major issue.

 

How can we help?  

At PwC, we can help you by:

  • Identifying possible fraud scenarios through the facilitation of fraud workshops that can help to determine where fraud is likely to occur;
  • Performing a maturity assessment of your anti-fraud framework and reviewing your business against our list of potential fraud "red flags";
  • Determining if your IT processes are adequate to reduce the chances of cybercrime; 
  • Once a fraud has been identified and the investigations completed, our internal controls specialists can also help remediate to reduce the chances that the problem will recur.

 

 

How we added value for our clients

  • Assisted companies to establish and enhance their anti-fraud frameworks to provide comfort to the board that a robust system is in place;
  • Helped boards and management to reinforce a strong tone at the top through training and education;
  • Facilitated fraud risk identification and assessment workshops to highlight areas of potential fraud risk; and
  • Provided controls remediation advice to prevent fraud incidents from reoccurring.

 

Contact us

Jasper Xu
China and HK Governance and Internal audit service Leader
Tel: +[86] (21) 2323 3405
Email

Stephen Ducker
Partner
Tel: +[86] (10) 6533 2279
Email

Cimi Leung
Partner
Tel: +[852] 2289 2997
Email

Eric Yeung
Partner
Tel: +[852] 2289 1953
Email

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