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Effective%20Auditing%20

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Effective Auditing & Monitoring Across Multi-Country operations Nieves Liste Forensic Audit Director Covidien First International Medical Device Compliance – PowerPoint PPT presentation

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Title: Effective%20Auditing%20


1
Effective Auditing Monitoring Across
Multi-Country operationsNieves
ListeForensic Audit DirectorCovidien
  • First International Medical Device Compliance
  • Congress and Best Practices Forum
  • Paris, 26-27 May 2008

2
Agenda
  • Speaker Profile
  • Covidien at a Glance
  • Overview of Covidien Compliance Program
  • Auditing Monitoring
  • Challenges for the future

3
Speaker Profile
  • BBA MBA Degree from ESADE, Spain
  • 2 years in public accounting (Arthur Andersen)
  • 8 years in Tyco International in Internal Audit,
    Mergers Acquisitions and Forensic Audit
  • 15 years in Covidien as Director of Forensic
    Audit
  • CFE certified

4
Covidien at a glance
  • Spin off from Tyco June 29, 2007
  • Revenue of 9 billion
  • A global healthcare products company
  • Over 42,000 employees worldwide in 57 countries
  • Products sold in over 130 countries
  • 43 of sales from outside the US
  • 61 manufacturing sites worldwide
  • Sales Marketing
  • Direct sales force in over 50 countries
  • Third party distributors
  • 23 distribution centres around the world

5
2007 Net Sales by Business Segment
Medical Supplies 0.9B
9
Pharmaceutical Products 0.9B
10
10
10
59
13
68
Medical Devices 6.0B
Imaging Solutions 1.1B
12
9
Covidien January 22, 2019
5
6
Medical Devices Overview
2007 Sales by Product Group
Other
Clinical Care
6
  • 2007 Net Sales 6.0B
  • Strong franchises, market
  • leadership positions and a highly
  • diversified product portfolio
  • No single product accounts for
  • more than 1 of sales
  • Channels Primarily hospitals, with
  • an increasing presence among
  • alternate site healthcare providers

Endomechanical
SharpSafety
Vascular Devices
Soft Tissue Repair
Airway Ventilation
Oximetry Monitoring
Energy Devices
Covidien January 22, 2019
6
7
Imaging Solutions Overview
2007 Sales by Product Group
  • 2007 Net Sales 1.1B
  • Products contrast media,
  • delivery systems and
  • radiopharmaceuticals
  • across multiple modalities
  • (x-ray, MRI and nuclear
  • medicine).
  • Purpose To help diagnose
  • disease as early as possible.

Radiopharmaceuticals
Contrast Products
Covidien January 22, 2019
7
8
Pharmaceutical Products Overview
2007 Sales by Product Group
Dosage Pharmaceuticals
  • 2007 Net Sales 908MM
  • Products Dosage
  • Pharmaceuticals (branded and
  • generic), Active
  • Pharmaceutical Ingredients
  • 10th largest pharmaceutical
  • company in United States
  • based on prescriptions
  • dispensed.

Active Pharmaceutical Ingredients
Covidien January 22, 2019
8
9
Medical Supplies Overview
2007 Sales by Product Group
Original Equipment Manufacturer
  • 2007 Net Sales 887MM
  • Leading provider of a broad
  • range of high quality products
  • used to improve patient care,
  • including traditional wound care,
  • incontinence, diagnostic and
  • monitoring electrodes, operating
  • room kits and accessories
  • 1 or 2 market positions across
  • core product categories

Nursing Care
Medical Surgical
Covidien January 22, 2019
9
10
Strong Line-Up of Well Recognized Brands
Covidien January 22, 2019
10
11
Overview of Covidien Compliance Program
  • Written Standards
  • The Covidien Guide to Business Conduct
  • Covidien Comprehensive Compliance Program
  • Proactive measures
  • Fraud Risk Assessment
  • Education Training
  • Internal Lines of Communication
  • Integrity Helpline
  • Ombudsman Office
  • Auditing Monitoring
  • Reactive measures
  • Investigate Past Potential Violations
  • Corrective Action Procedures

12
Education Training
  • Mandatory online training modules
  • FCPA Live training meetings with top management,
    sales trainees, sales and marketing employees and
    other personnel
  • Fraud case studies
  • Integrity Bulleting
  • A recent initiative The Ethics Circle
  • 10-15 work colleagues led by an integrity
    champion
  • A monthly meeting of 1 hour to discuss business
    practices ethical compliance
  • Provide training and understand employee issues
  • Helps clarify polices and procedures

13
Corporate Audit Organization
  • Independent Corporate Audit Function
  • Team of approximately 30 people
  • Geographically and Functionally based
  • Dedicated Forensic auditors
  • Use of outside consultants

14
Auditing Monitoring
  • Audit scope and resources
  • Customized audit programs to industry/geography
    risk
  • Auditors trained on compliance and involved in
    investigations
  • Third party due diligence questionnaires
  • Categorize Red Flags

15
Red Flags for third party agents and distributors
  • High risk countries
  • Refusal to represent or certify FCPA policy
  • Statements that
  • FCPA does not apply to them
  • Anti-Bribery policies are too restrictive
  • Requests for
  • Excessive or unusually high compensation
  • Large one-time success fees
  • Marketing funds/slush funds
  • Increase in compensation during sales campaign
  • Payments to third countries or third parties
  • Cash payments
  • Lack of facilities or qualified staff
  • Use of shell companies
  • Negative reputation
  • Refusal to
  • Enter into an agreement
  • Record a transaction properly in their books and
    records
  • Close relationship to government officials

16
How are issues raised?
  • Complaint sources
  • Integrity Line
  • Direct call to Ombudsman
  • Business
  • Audit/Legal/HR
  • Board of Directors
  • Investigators
  • Forensic Audit
  • HR
  • Legal
  • Security
  • Business

Ombudsman manages flow of complaints
Ombudsman reports to the Audit Committeean
objective facilitator
17
Types of issues investigated
  • Accounting irregularities
  • Asset Misappropriation
  • TE/Procurement fraud
  • Breach of Internal Controls/Policies
  • Conflict of interest
  • Improper payments

18
Cases per region
19
Challenges of a Global Forensic Function
  • Language
  • Cultural differences
  • Understanding FCPA laws and local laws
  • Third parties
  • Certain regions/countries

20
My key learning
One size does not fit all Flexibility, open mind
and local expertise are key to success for
effective auditing monitoring across
multi-country operations.
21
Questions
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