US firms fight cross-border fraud best as Asian peers lag
A KPMG study shows that corporations are unprepared to investigate fraud promptly and effectively, if it occurs in a country other than where they are headquartered.
By TNN |
NEW DELHI: Companies across the world and especially those headquartered in Asia are vulnerable to cross-order fraud. A KPMG study shows that corporations are unprepared to investigate fraud promptly and effectively, if it occurs in a country other than where they are headquartered.
While American companies have the highest ability to detect cross-border frauds, their Asian counterparts have the lowest fraud investigative protocol, the study said.
According to the report, which surveyed senior business executives in 21 countries, 92% of the respondents said they don’t expect any abatement — and many expect an increase — in the number of international investigations in the coming year. Yet, 56% said they have not implemented comprehensive investigation procedures. By contrast, 60% of the executives acknowledge that planning an investigation remains key to its success.
“Fraudsters operate undeterred by global boundaries,” said KPMG India head (forensic services) Deepankar Sanwalkar. Companies face cultural, linguistic and legal hindrances while dealing with cross-border frauds, the study said. Unavailability of an investigating team and non-availability and accessibility of electronic data are some of the other challenges that companies face when dealing with corporate frauds.
“In addition to financial loss, an ineffective investigative process can adversely reflect on an organisation’s reputation, its risk management abilities, and its commitment to good corporate governance.
Companies should establish broad investigative procedures, knowing that they should be tailored to each respective country, ideally with a well-trained local team that knows the language, culture, and legal and regulatory environments,” added Sanwalkar.
About 48% of the survey respondents said their investigative staff had received training during the last six months, while 27% said that their staff had not been trained within the last year.
While American companies have the highest ability to detect cross-border frauds, their Asian counterparts have the lowest fraud investigative protocol, the study said.
According to the report, which surveyed senior business executives in 21 countries, 92% of the respondents said they don’t expect any abatement — and many expect an increase — in the number of international investigations in the coming year. Yet, 56% said they have not implemented comprehensive investigation procedures. By contrast, 60% of the executives acknowledge that planning an investigation remains key to its success.
“Fraudsters operate undeterred by global boundaries,” said KPMG India head (forensic services) Deepankar Sanwalkar. Companies face cultural, linguistic and legal hindrances while dealing with cross-border frauds, the study said. Unavailability of an investigating team and non-availability and accessibility of electronic data are some of the other challenges that companies face when dealing with corporate frauds.
“In addition to financial loss, an ineffective investigative process can adversely reflect on an organisation’s reputation, its risk management abilities, and its commitment to good corporate governance.
Companies should establish broad investigative procedures, knowing that they should be tailored to each respective country, ideally with a well-trained local team that knows the language, culture, and legal and regulatory environments,” added Sanwalkar.
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About 48% of the survey respondents said their investigative staff had received training during the last six months, while 27% said that their staff had not been trained within the last year.
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