Economic crime hits 40% of Asia Pacific companies
Updated
Almost 40 percent of companies working in the Asia
Pacific have been a victim of some kind of economic crime, costing each
company more than one million dollars. What's troubling for the region
is that despite increasing government rhetoric and policy measures, the
number of companies affected hasn't changed since 2003.
Speakers:
Akhbar Satar, Malaysian Centre for Fraud Management, Hill and
Associates fraud expert John McFarland, Executive Director Price
WaterHouse Coopers Malaysia Chong Shao Yen
.
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RANDHAWA :
Even the Japanese cartoon 'Anime' elections are rife with corruption
this year, a reflection of the state of economic crime in the region.
In a survey by Price Waterhouse-Coopers 60 percent of companies say
they've lost business to a competitor, after being asked to pay a
bribe. And the losses from crime have gone up by around a million
dollars to each company in the survey. A conference held in Malaysia
hopes to contribute to changing that. One of the speakers John
McFarland is a fraud expert from Hill and Associates in Hong Kong. He
warns against a uniform approach to tackling fraud.
MCFARLAND:
It's not like you have fraud in Australia, and you have common themes,
common understandings, Asia is a multi-cultural, mixed race, mixed
business model society. And y'know some definitions of fraud don't
apply, the ability to obtain information and evidence is not always the
same in each location. For companies in Asia its very important if
they're to have any anti-fraud model, their anti-fraud model should be
localised so it understands what the issues in each country are, some
of the cultural issues and some of the understandings.
RANDHAWA: From Price Waterhouse Coopers, Chong Shao Yen explains what economic crime is.
CHONG:
Categories as we call it there would be like asset misappropriation and
accounting fraud, corruption and bribery, IP infringement and such like.
RANDHAWA : And what's their impact on business?
CHONG:
In terms of impact on business, quite gray, certainly fro the
participants who say they have suffered economic crime in Asia and the
Pacific, overall its about 39 percent.
RANDHAWA: How much does that cost them?
CHONG: Direct losses for Asia Pacific would be about 1.4 million US, per company over the last two years.
RANDHAWA : He says, though, long-term measures are needed to tackle corruption.
CHONG:
We have what we call a fraud control paradox in that when you start
implementing more controls chances are you'll discover more fraud. And
then you ask yourself, well I'm putting more controls in, why am I
having more fraud, essentially you're not having more fraud, you're
discovering more fraud.
RANDHAWA: But companies need to take into account cultural factors. Fraud expert John McFarland.
MCFARLAND:
If we go back 20 years, we saw China for example with lots and lots of
foreign investment going in but huge numbers of fraud risks occurring,
now with World Trade Organisation, with world agreements we're seeing
China actually move away from those sorts of frauds and culturally
we're seeing it become a more commercial, a more modern but in other
countries we will always have cultural issues. People's understanding
of what a fraud or economic crime is are different, some people believe
if you are a big foreign company and you've got lots of money then its
okay to take a little bit off you by not telling the truth in how
something is presented, something is acquired.
RANDHAWA: And they can't work on their own. Akhbar Satar is the director of the Malaysian Centre for Fraud Management.
SATAR:
More importantly you have to change people's attitude. Corruption
starts from attitude because in Indonesia, corruption is quite rampant
because to get anything here right now you have to pay, so that's why
the government is fighting to set up a stronger anti-corruption
initiative.
