Navigating through fraud and corruption risks in APAC

The past year has been burgeoning with growth and expansion opportunities for most countries across the globe, especially in the Asia Pacific region. Increased emphasis on cross border transactions, foreign direct investment and digital inclusion have been some of the contributing factors for the rapid economic and sustainable growth of this region. While countries in the Asia Pacific swiftly move up the ladder of development, organizations continue to grapple with issues related to fraud and corporate misconduct. Thus, detection and deterrence has become crucial than ever before to remove bottlenecks and conduct businesses in a streamlined manner.

The drive to increase corporate value through increased compliance is sensed in most Indian organizations today, but there have been sporadic discussions when it comes to executing compliance programs that will address potential risks and help in dealing with emerging issues such as cybercrime, NPAs, money laundering, tax investigations, terrorist financing etc. All these elements prompted our Fraud Investigation & Dispute Services (FIDS) team to conduct an exclusive breakfast session on ‘Compliance in India Inc.’ in Gurugram. EY’s APAC Fraud Survey 2017 was also unveiled at the session that encapsulated bribery and corruption challenges in the Asia-Pacific region.

The session had well-known experts from the Government and private sector, Praveen Sinha, Additional Secretary, Central Vigilance Commission (CVC), Shahana Basu, Director – Legal & Regulatory Affairs, Max India, Nandita Khurana, Zone Head-Legal, Africa India Middle- East, Michelin Tyres and Surath Mukherjee, Head Internal Audit, Dalmia Bharat Group. The experts shared their experiences on fraud risks, importance of transparency and accountability to infuse sound governance and the need to build robust compliance programs to combat economic crimes.

Praveen Sinha, Additional Secretary, Central Vigilance Commission (CVC), also the chief guest at this session, discussed current measures undertaken by the CVC and its operations. He also stressed that trainings, both in the public and private sector organizations should include bribery and compliance mechanisms to combat fraud. He also added that it is important to have a proper diagnosis to combat corruption.

Arpinder Singh, National Leader with Fraud Investigation & Dispute Services, EY India sub area, shared key highlights of the APAC Fraud Survey. He pointed out that a majority of the respondents in the APAC region consider compliance culture to be an important factor while choosing their future workplace. The survey further highlighted that the anti-bribery and anti-corruption programs need to be simplified and communicated to employees at regular intervals by the senior management for ethical conduct. Arpinder also threw light on the steps like the use of techniques such as Forensic Data Analytics, setting up of whistleblowing hotlines etc. that can be taken by organizations in India to mitigate potential threats.

The event concluded with a captivating panel discussion on ‘Bridging the compliance gap through leading global practices’ along with the esteemed set of panelists. The conversation revolved around critical elements comprising internal compliance plans, such as implementation of existing policies and procedures, evaluating changing behaviour of employees, strengthening internal controls, regular training and awareness for employees, prompt response to problems detected and the adoption of technology to increase the overall compliance efforts. The panel also discussed about the practical challenges in implementation and initiatives that can bring-in greater buy-in for compliance.

Shahana Basu of Max India shared her views that proactive risk assessment and continuous monitoring of activities conducted by oversight committees for robust ethical foundation will be key in battling risks. While Nandita Khurana of Michelin Tyres highlighted the changing role of General Counsels in the current landscape, they will be expected to don multiple hats and support businesses in various decisions. Surath Mukherjee from Dalmia Bharat Group spoke about breaking complex structure in organizations and encouraging transparency among employees to sustain business.

Thus, organizations in India could look at tackling challenges to mitigate fraud, bribery and corruption by fortifying their internal compliance framework or structure. With the impact of fraud increasing on all fronts and ultimately affecting the bottom line of an organization, it is only imperative to re-energizing corporate India’s compliance quotient that will eventually transform the present business sphere.

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