Corruption, fraud and bribery scandals are common these days. They happen in every industry, although the degree may vary from sector to sector. Although many cases are being investigated by the authorities, fraud is indeed on the rise. One of the leading audit, tax and advisory firms, KPMG, revealed the findings of a survey it had carried out on fraud, corruption and bribery in Malaysia. The glaring finding is that fraud cases have increased by nearly 100% in Malaysia over the past three years. This is because some companies in Malaysia believe that the best way to win contracts is by giving kickbacks. To some, it is better to win a contract by paying out some money rather than not getting it at all. A few years ago, it came to light that a French telecoms company had paid off some local consultants to obtain information on marketing strategy. Many are willing to pay, as long as they don’t get caught. The common factors that trigger fraud in companies, according to the survey, are poor internal controls, the lack of skill sets to detect fraud and lack of fraud awareness training to detect “red flags”. Fraud may be on the rise, but a startling discovery is that business cannot be done in Malaysia without paying bribes. This is threatening the very fabric of Malaysia’s business landscape. As it is, bribe-taking was found to be most rampant in Malaysia among 30 countries surveyed last year by Transparency International, even as the country improved its ranking to 54th spot from 60th among 176 nations in the institution’s Corruption Perception Index. Bribery and fraud, including kickbacks, pose the biggest risks to industries in the future, according to the survey, and a lot occurs via false invoicing, misappropriation of funds, false claims, counterfeiting and piracy. a.Based on the case, the author stated that “The common factors that trigger fraud in companies, according to the survey, are poor internal controls, the lack of skill sets to detect fraud and lack of fraud awareness training to detect “red flags”. Besides the above factors, critically examine additional factors that trigger fraud to occur in business organisations in Malaysia. b.Evaluate the importance of government role in reducing corruption.
Corruption, fraud and bribery scandals are common these days. They happen in every industry, although the degree may vary from sector to sector. Although many cases are being investigated by the authorities, fraud is indeed on the rise. One of the leading audit, tax and advisory firms, KPMG, revealed the findings of a survey it had carried out on fraud, corruption and bribery in Malaysia. The glaring finding is that fraud cases have increased by nearly 100% in Malaysia over the past three years. This is because some companies in Malaysia believe that the best way to win contracts is by giving kickbacks. To some, it is better to win a contract by paying out some money rather than not getting it at all. A few years ago, it came to light that a French telecoms company had paid off some local consultants to obtain information on marketing strategy. Many are willing to pay, as long as they don’t get caught. The common factors that trigger fraud in companies, according to the survey, are poor internal controls, the lack of skill sets to detect fraud and lack of fraud awareness training to detect “red flags”. Fraud may be on the rise, but a startling discovery is that business cannot be done in Malaysia without paying bribes. This is threatening the very fabric of Malaysia’s business landscape.
As it is, bribe-taking was found to be most rampant in Malaysia among 30 countries surveyed last year by Transparency International, even as the country improved its ranking to 54th spot from 60th among 176 nations in the institution’s Corruption Perception Index. Bribery and fraud, including kickbacks, pose the biggest risks to industries in the future, according to the survey, and a lot occurs via false invoicing, misappropriation of funds, false claims, counterfeiting and piracy.
a.Based on the case, the author stated that “The common factors that trigger fraud in companies, according to the survey, are poor internal controls, the lack of skill sets to detect fraud and lack of fraud awareness training to detect “red flags”.
Besides the above factors, critically examine additional factors that trigger fraud to occur in business organisations in Malaysia.
b.Evaluate the importance of government role in reducing corruption.
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