Business Integrity and Fraud Prevention By Kelvin Ko and Andy Cheung

Kelvin Ko Managing Director, Verity Consulting  15 years of investigation practice  Ex-HK Police Inspector  Experience from US listed Risk Management Company  Certified Risk Planner  Executive MBA from the Chinese University of HK

Importance of Business Integrity  Global problem among large and small corporations  Uphold ethical standards  Build trust within company and with clients and business partners  Leads to long term success  Potential damages to unethical actions Monetary Trust Reputation

Pre-Employment Screening for Individuals  Better candidates = Better workforce  Avoid long term costs  Promote a safe working environment  Maintain trust and good reputation  Key practice to uphold integrity in the work place

Areas to Verify and Investigate  CV verification  Telephone enquiries with referees  Background check and searches Corporate records research Property ownership research Litigation and bankruptcy search Media search  Integrity interview

Due Diligence for Partnerships  Minimize potential risks  Make better informed decisions  Incorporate proper compliance program  Avoid costly mistakes  Negotiate for better terms

Areas to Verify and Investigate  Financial research Current and past financial data, asset, performance  Business integrity Management style, reputation, past partnerships  Legal and related matters Legal cases, tax laws compliance, criminal history  Database research Verification of business, confirm unethical practices

 ICAC  Forensic investigation team of Big Four accounting firm  In charge of business ethics & investigation function of a MNC’s Asia Pacific arm Andy Cheung Founding Principal, MAWSL Consulting

Corruption & Fraud Around the Globe

Fraud Triangle How strong/vulnerable is your company while facing fraud risk? Internal/External factors affecting the potential fraudster Psychological justification of the wrongdoing

FAQ for Fraudsters 1.Is it worth to take the risk? 2.What is the chance that I get caught? 3.What is the consequence if I get caught?

Develop your company’s ethical framework  Tone at the top  Recruitment  Vendor selection process  Code of conduct  On Board ‧ Appraisal ‧ Exit  Workflow review  Whistleblower hotline  Investigation procedures  Ethics training

Develop your corporate values  Make Integrity as one of the cornerstones of your company  Demonstrate in words & actions  Build up a collective attitude within the company

Possible Negative Impacts  Prosecuted by law enforcement  Fine by court  Sanction by government  Loss of credibility in the market  Negative impact on share price  Affect morale – increase staff turnover, loss of corporate knowledge and reduced productivity

Q & A Thank you