A majority of executives (59 percent) in Singapore said that their companies' ABAC (anti-bribery and anti-corruption) policies are good in principle but do not work well in practice, according to Ernst & Young's first Asia-Pacific fraud survey, titled "Building a more ethical business environment."
This figure lags behind the Asia-Pacific average of 48 percent on effective policies. "While Singapore appears well-placed structurally to deal with fraud, bribery and corruption, with just a few of the respondents saying that bribery and unethical behaviours are widespread in the country, there is still a gap between the regulatory framework and companies effectively implementing this in practice," said John Tudorovic, Fraud Investigation & Dispute Services Partner at EY.
The survey also shows that only 17 percent of Singapore respondents, compared to over 35 percent in Asia-Pacific, acknowledged that planned investments in new markets will expose the company to new risks.
The lack of regular training and management commitment to ABAC policies are also cause for concern. Only 18 percent of Singapore respondents said that their management has strongly communicated their commitment to their ABAC policy, compared to the Asia-Pacific average of 35 percent.
In addition, only 14 percent of respondents reported that they have received annual training on their ABAC policies, compared to the Asia-Pacific average of 27 percent.
Lawrance Lai, Fraud Investigation & Dispute Services Partner at Ernst & Young LLP said: "A consistent and clear tone at the top and employee education must go in hand with a robust anti-fraud and compliance plan that incorporates whistle-blowing schemes and technology such as forensic due diligence to monitor transactions in mergers and acquisitions, and forensic data analytic techniques to detect fraud."
The survey revealed that while 71percent of Singapore companies (Asia-Pacific: 81 percent) said they would be prepared to use the whistle-blowing procedure, only 17 percent actually operate such a scheme.
Just over half (54 percent) use technology, such as transaction monitoring or forensic data analytics, in their compliance. The most popular options for anti-bribery and anti-corruption compliance monitoring are still through internal audits (61 percent) and external audits (59 percent).
In fact, Singapore respondents viewed stronger government regulations and stronger internal audit teams as the two best proactive measures. Only 7 percent of Singapore companies said that the use of technology was the best way to proactively detect fraud.
Tudorovic believes that many companies are missing out on the opportunity to proactively use technology to its full capacity to mitigate fraud risks.
The polled respondents also believe that compliance and anti-fraud measures can fall by the wayside when market conditions are volatile or challenging, with 27 percent of Asia-Pacific respondents—and Singapore respondents to a lesser extent (11 percent)—agreeing that company management is likely to take shortcuts to meet targets in harsh economic conditions.
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