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“Chinese Enterprise Anti-Fraud Investigation Report 2022” is released!

“Chinese Enterprise Anti-Fraud Investigation Report 2022” is released!


recently,“Chinese Enterprise Anti-Fraud Investigation Report 2022” is released!This report has been released regularly since its first publication in 2018. This report is the third blue book on anti-fraud in Chinese companies issued by the Enterprise Anti-Fraud Alliance.

In order to further understand the current situation of corporate fraud in my country, the construction of the anti-fraud mechanism and the effectiveness of the construction of the anti-fraud mechanism, on the basis of conducting two anti-fraud questionnaire surveys for member units in 2018 and 2019, the Working Committee of the Enterprise Anti-fraud Alliance will conduct a survey in 2021. A new round of anti-fraud questionnaire survey will be carried out from September 24 to November 17. The objects of the survey are Chinese enterprise groups with leading enterprises in various industries as the main body. The questionnaire survey adopts the online electronic questionnaire method, and the data processing and analysis are carried out through the combination of automation and manual methods. On the basis of sorting out the institutional background, theory and related literature of anti-fraud, using the questionnaire survey data, the research team analyzed the current situation of corporate fraud and the establishment and improvement of the anti-fraud mechanism, and carried out comparative analysis of trends, domestic and foreign comparative analysis and real estate research. Industry analysis and other anti-fraud research. At the same time, it also discussed and analyzed the excellent anti-fraud cases of the Enterprise Anti-Fraud Alliance and the career development trend of anti-fraud specialists. After in-depth discussions and revisions by the expert group and professionals from various fields, the “Chinese Enterprise Anti-Fraud Investigation Report 2022” was finally formed. This report aims to fully demonstrate the anti-fraud practice of the most dynamic representative enterprises in my country’s economy, discover existing problems and summarize relevant successful experiences, so as to help the development of my country’s enterprise anti-fraud cause. This report can provide references and references for enterprises to steadily promote the construction of anti-fraud mechanisms, ensure that the construction of enterprise anti-fraud systems is implemented, and provide reference for regulators to formulate policies.

  

  The report pointed out that the current situation of fraud is not optimistic, the establishment and improvement of the traditional anti-fraud mechanism still needs to be strengthened, and the emerging anti-fraud mechanism needs to be paid attention to.

Combined with the current situation of fraud, the report emphasizes and puts forward the following suggestions:

  one,Pay attention to areas with high risk of fraud

First, the procurement department and sales department should be the focus of anti-fraud work, and the real estate industry needs to pay special attention to the fraud risks in its sales process. Second, we should formulate corresponding preventive measures in accepting bribes, kickbacks and embezzling assets to reduce the occurrence of fraud cases. Third, enterprises should pay attention to establishing internal control and prevention measures for destroying electronic documents and files, creating fake files, tampering with reconciliation information, and destroying files, so as to restrain the hidden behavior of fraudsters.

  2. Pay attention to the problem of younger age fraud

From the three aspects of improving ideological quality, strengthening system constraints, and improving work incentives, we guide young employees to face the pressure of work and life correctly, keep the bottom line of morality and law, and establish the values ​​of integrity and integrity.

  3. Pay attention to abnormal behavior of employees

We should focus on those subjective and personalized factors that affect personal behavior, including personal accomplishment, value orientation, life or work attitude, etc.

  4. Improving the fraud detection channels

Setting up a reporting system is essentially “mobilizing the power of the masses”, giving all employees the right to supervise fraudulent behavior, realizing supervision by the whole people, and reducing the chance of fraud. As an important form for enterprises to discover fraud, enterprises should pay attention to the establishment and improvement of the reporting system, enrich the forms and channels of reporting, encourage and protect whistleblowers to a greater extent, and make whistleblowers “dare to speak out”. At the same time, we should pay attention to the role of big data technology in fraud discovery, use big data technology to empower anti-fraud work, improve the ability of anti-fraud departments to detect and warn of fraud, and then make fraud invisible.

  V. Strengthening the construction of the “2.0 era” system of internal control

First, regulators should improve the internal control normative system and promote enterprises to improve their internal control management level; second, enterprises should strengthen the internal control system to effectively implement and give full play to the value of internal control; third, flexibly respond to the uncertainty of the external environment, and use digital technology as Empowerment; Fourth, focus on improving the internal control of weak links, and at the same time encourage enterprises to strengthen internal control construction in a personalized manner.

  6. Improve the blacklist system

As an important force in corporate anti-corruption, the construction of the blacklist system should be valued and improved. First of all, the relevant government departments should issue a unified “employee “blacklist” management system” to clarify the identification and implementation standards of the “blacklist”, so that the enterprise blacklist system can be protected and standardized, so that there are laws to follow, and enterprises and The legitimate rights and interests of employees. Secondly, build a unified employee “blacklist” publicity platform, such as the blacklist sharing system of the Enterprise Anti-Fraud Alliance. Establish and improve, so as to promote the sharing of integrity information and data in a wider range, so that fraudulent behavior has nowhere to hide in the sun.

  7. Promoting anti-corruption legislation in private enterprises

The key to the difficulty of anti-corruption in private enterprises lies in the lack of protection of private enterprises’ property rights, so it is urgent to strengthen relevant legislation on the protection of private enterprises’ property rights. At the same time, law enforcement agencies and judicial agencies should pay more attention to the corruption cases of private enterprises.

  8. Strengthen the construction of corporate integrity culture

It is the premise of cultivating corporate integrity culture that senior leaders pay enough attention to integrity, the general recognition of corporate employees on integrity is the foundation of corporate integrity culture construction, and the formal anti-fraud systems such as internal audit and internal control are the guarantee for the continuation of integrity culture.

  9. Anti-fraud using new technology

For corporate anti-fraud, the audit department takes the lead, so the audit department should not lag behind in new technologies, especially information system auditing, deep learning, etc., and the accelerated digital transformation of enterprises is fundamental to reduce fraud. The digital transformation of an enterprise is to map all the business in the real world of the enterprise to the digital world, that is, to record every business of the enterprise as electronic data. In the case analysis chapter of this report, it was found that all businesses of enterprises undergoing digital transformation are exposed to the sun, which provides potential fraudsters with no room to take advantage.

  Summary of “Chinese Enterprise Anti-fraud Investigation Report 2022”

This report points out that the two links of procurement and sales have the highest probability of fraud, and the number of fraudsters appearing in the sales department and purchasing department of each company is also the most, respectively 230 times (1670 people) and 230 times in the 504 surveyed companies 176 times (514 people).

  

Figure 1 Department where the fraudster is located

This report pointed out that the frequency of bribery and kickbacks and asset misappropriation cases accounted for a high proportion, 52% and 24% respectively. Variety.

  

Figure 2 The proportion of the nature of fraud cases and the amount of losses

This report points out that the average duration of fraud cases is mainly 7 to 12 months, followed by less than 6 months, and 13 to 18 months, and the sum of the three accounts for 82%. And, the longer the fraud lasts, the greater the loss caused by the fraud case.

Figure 3 Domestic comparison of the duration of fraudulent behavior

This report points out that the top three channels for enterprises to discover fraud are internal reporting hotline (79%), internal auditing (75%) and external reporting (50%), which is consistent with the “Chinese Enterprise Anti-fraud Investigation Report 2019”, According to the website of the National Commission for Discipline Inspection of the Central Commission for Discipline Inspection on January 21, 2022, in 2021, the national discipline inspection and supervision agencies received a total of 3.862 million letters and visits and reports, dealt with 1.826 million clues to problems, filed 631,000 cases, and punished 627,000 people. Reporting is an important channel for discovering violations.

Figure 4. Channels for discovering fraud

This report points out that among the sources of direct evidence in fraud cases, interviews (77%) and financial data/vouchers (57%) are the two most important sources of direct evidence in fraud cases, which is the same as in the “Chinese Enterprise Anti-Fraud Investigation Report 2019” Compared with 26% and 28%, there is a big improvement.

Figure 5 Sources of Direct Evidence in Fraud Cases

This report points out that the proportion of companies whose monetary loss from fraud is less than 500,000 yuan and between 1 million and 5 million yuan is relatively large, accounting for 27% and 25% respectively. The proportion of enterprises with a loss of less than 1 million yuan is 41%. The proportion of enterprises with an amount exceeding 5 million yuan is 32%; in terms of recovery of fraud losses, 37% of enterprises recovered 1%-25% of losses, 21% of enterprises recovered 26%-50% of losses, 38%[①此处三者之和占比为37.74%,故四舍五入为38%。]Of the companies recovering more than 50% of the losses, only 4% of the companies did not recover any losses, which is basically consistent with the “Chinese Enterprise Anti-Fraud Investigation Report 2019”.

Figure 6 Fraud loss amount in each interval ratio

This report points out that 92% of enterprises have set up reporting platforms, and the setting and application of reporting platforms present more diversified characteristics. E-mail reporting is the most widely used, accounting for 96%; followed by telephone hotline, accounting for 92%.

Figure 7 The official channels of the reporting platform of the enterprise

According to this report, the top ten new technologies (and their frequencies) that are currently most used by internal audit are: audit electronic archives (67%), big data technology (59%), data mining (54%), audit data warehouse ( 46%), online audit (43%), information system audit (42%), deep learning (38%), knowledge map (37%), audit data center (37%), visualization technology (35%).

Figure 8 Top Ten Audit New Technologies

This report points out that anti-fraud-related talent reserves are also an important part of anti-fraud culture. Some professional qualification titles reflect the professional skills of anti-fraud, such as Certified Public Accountant (CPA), International Certified Internal Auditor (CIA), International Certified Anti-fraud Professional (CAP) and so on.

Figure 9 Anti-fraud personnel holding certificates

This report points out that the blacklist sharing system is highly recognized in the business community. The blacklist is similar to the current “list of dishonest persons subject to enforcement” in my country, which exposes dishonesty to the sun, increases the cost of dishonesty, and achieves the role of preventing dishonesty.

Figure 10 Deterrence of the blacklist



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