A new report has shown that almost half of the Asia-Pacific companies are confident of their internal fraud controls (Singapore Press Holdings Limited 2005). But here's the fact: Only 16 per cent of economic crimes in the region were detected by risk-management systems. In fact, the vast majority of incidences of economic crime were detected by accident, tip-off, and internal and external audit (PriceWaterhouse Coopers 2003).
Here in the case study of Informatics Group (Singapore) Private Limited was the 84 per cent where the conspiracy was exposed. The company reported that its business entity owned, Computer Assisted Learning (CAL), had submitted false National IT Literacy Programme (NITLP) claims of S$347,000 to Infocomm Development Authority of Singapore (IDA) (Commercial Affair Department, Singapore Police Force 2005).
In the conspiracy, Rudy Kua with his accomplices primarily draw on the weakness that there was no alternate checks in placed in submitting the claims to IDA. On top of that, the lack of accountability in receipt and payment by CAL from and to other companies respectively enable them to conceal the evidences of their crime.
We identified the issue as a fraud act committed by the employees of CAL. In further examine the conspiracy, we noted that CAL has two main loopholes in their business practices that resulted in employee taking advantage of it and hence violated the ethical issues.
Firstly, the lack in senior management's commitment and responsibility for identifying risk exposures to fraudulent. Secondly, the need for establishing controls, policies and procedures for prevention and detection of these activities. In general, we stress that CAL may be placing too little attention on the development of effective controls and alternative checks and balances.
2. A Proposed Ethics Policy
We proposed an Anti-Fraud Policy as an approach to counteract the issues raised in the case study. The purpose of Fraud...