APEC AntiCorruption and Transparency Taskforces Workshop Towards Transparency Principles for the Pri

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APEC Anti-Corruption and Transparency
Taskforces Workshop Towards Transparency
Principles for the Private Sector
Transparency Principles A view from the
Private Sector
Steve Ingram, Partner PricewaterhouseCoopers
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References

• The green/grey coloured tables and related
  statistics have been sourced from the Association
  of Certified Fraud Examiners 2006 Report to the
  Nation on Occupational Fraud and Abuse (ACFE
  2006).
• This report can be downloaded from the ACFE web
  site at
• http//www.acfe.com/home.asp
• The red coloured tables and related statistics
  have been sourced from the PwC Global Economic
  Crime Survey 2005 (PwC 2005).

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Context

• Economic Crime is widespread
• 45 of survey respondents (63 in Australia)
  reported economic crime
• Economic Crime is increasing - an average 8
  increase on 2003 survey
• Western Europe was 8 on 2003
• Central Eastern Europe was 10 (21 since 2001)
• North America was 9
• Asia-Pacific was 0
• What has caused this rise?
• An increase in the amount of economic crime being
  committed?
• Tightening market regulations and controls, so
  increase in companies efforts to demonstrate
  transparency and governance (and/or better
  detection)?
• Decreased stigma. Some regulators foster an
  environment where it is okay to report and remedy
  economic crime - good governance? (PwC 2005)

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• The Bigger they are..
• Greater opportunities
• More devolution
• Transactional complexity
• Better detection systems
• More common view of economiccrime as being a
  victimless crime
• Risks arising from remote or international
  operations
• Dynamic Change - opportunity makes the thief -
  (20 higher vulnerability)
• Good news!
• Long seen reported incidents in regulated
  industries (eg FS)
• Now increased detection levels in unregulated
  industries. Is this because
• Broader Regulator pressure to show good
  governance?
• Growing awareness of governance role in
  stakeholder confidence?
• And nearly 40 of regulated companies report
  recovery of lost assets, against 27 of
  unregulated industries (PwC 2005)

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Why do people Commit Economic Crime?
So how good are the initiatives to stop
it?.........
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(ACFE 2006)
7
(ACFE 2006)
8
(ACFE 2006)
9
(ACFE 2006)
10
Types of collateral damage experienced by
respondents
Stigma
(ACFE 2006)
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Bring it all together The Three Lines of Defence

• 1st Line - Enhancement of employee accountability
  (Empowerment)
• Value based code of conduct (not rules based)
• Employee (eg process owner) involvement
• Roles and responsibilities, top down
  demonstration/commitment
• 2nd Line - Promotion of ethical business
  practices
• Reducing opportunities for corruption (controls)
• Written policies and procedures for all areas
• Training awareness
• 3rd Line - Enhancement of detection and
  deterrence capabilities
• Mechanisms such as Hotlines
• Continuous risk management approach
• Internal and external audits (surprise!)

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Thankyou

• Association of Certified Fraud Examiners 2006
  Report to the Nation on Occupational Fraud and
  Abuse (ACFE 2006).
• http//www.acfe.com/home.asp
• PwC Global Economic Crime Survey 2005 (PwC
  2005).
• Steve Ingram steve.ingram_at_au.pwc.com