MITIGATING AND MANAGING CORPORATE FRAUD IN THE ASIA PACIFIC MARKET
RC: In your experience, what is the general attitude toward corporate fraud across the Asia Pacific region? How do such attitudes compare to elsewhere in the international community?
Hu: Generally speaking, almost all governments, companies and individuals in the Asia Pacific region would consider corporate fraud as bad practice which should be prevented and punished; this is in no way substantially different from the rest of the world. However, the level of tolerance by governments, companies and individuals toward corporate fraud when it actually occurs may differ, depending on the prevailing local culture, overall severity of corruption issues in the governmental systems, development stage of the local economy, stability of the country’s social structure and many other factors. People are generally less tolerant toward fraud activities which directly victimise individuals; while fraudulent activity which harms a company or the government is sometimes self-justified to a certain extent for various reasons.
Baker: Individuals in the region see fraud as generally wrong and no-one wants to be a victim, just like people in other regions in the world. What is different though is that there is an increased attitude of acceptance for fraud in the corporate sector among developing and emerging countries in the region. Consistent with the rest of the world, this attitude has become more prevalent in tougher market conditions, like those experienced in the region in the past couple of years. In particular, companies under earnings pressure and individuals with performance targets may take shortcuts or engage in inappropriate behaviour.
Apr-Jun 2017 Issue