Anticipate the unpredictable: Preventing and detecting financial crime

“There are risks and costs to any program of action. But they are far less than the long-range risks and costs of comfortable inaction.” John Fitzgerald Kennedy

Financial crime remains one of the greatest threats for business worldwide. It drains earnings. It exposes both companies and their senior management to criminal and civil liability. And worst of all, it can significantly damage companies’ most valuable assets — their reputation and their brand value as demonstrated by recent scandals.
Efficient prevention and timely detection are therefore critical to safely manage fraud risk, especially in a human-sized and dense business network such as Luxembourg’s.

Facing the fraud challenge

• Our 2007 Global Economic Crime Survey revealed that 46% of financial institutions and 57% of insurance companies had reported being victims of fraud.
• We anticipate stronger incentives and easier justification for committing fraud.
• More stringent regulatory requirements, not the least regarding fraud prevention, are to be expected.

In the meantime, we report in our 2007 Global Economic Crime Survey increasingly devastating fraud fallouts:

• 88% of reported fraud cases induced critical damage to the victim organisation’s brand.
• 69% of reported fraud cases substantially damaged the victim organisation’s share value.
• In 2007, the average direct financial loss induced by fraud resulted in EUR 1,440,000.
• 80% of reported fraud cases significantly damage the victim organisation’s relations with the local regulator and often lead to regulatory sanctions.
• 84% of reported fraud cases endangered the victim organisation’s external business relations.

Risk taking is fundamental to doing business. One way of making money consists in stopping losing it. Recent research highlighted that EUR 1 invested in fraud prevention could spare up to EUR 5.

PricewaterhouseCoopers integrated anti-fraud approach

The PricewaterhouseCoopers Antifraud Framework is designed to enhance or implement robust and comprehensive antifraud programmes and controls.

It is aligned with criteria for effective ethics and compliance programmes set by the Committee of Sponsoring Organisations (COSO) of the Treadway Commission, the International Auditing and Assurance Standards Board, the Institute for Internal Auditors and the Association of Certified Fraud Examiners:

• Control environment, with a key role to be played by the Board and Corporate Governance
• Fraud event identification and risk assessment
• Entity and business process level control activities
• Monitoring activities
• Incident response & remediation

Successfully deterring fraud is complex because it requires targeted actions at corporate, behavioural, transactional and system levels.

For this reason, we have designed a modular range of services which can be easily scaled to your specific needs.

Tailoring our value proposition to your very needs

To assist you in managing your financial crime exposure, we combine local expertise and our unique network of forensic professionals to deliver efficient, adapted and confidential responses to your requirements or specific scenarios relevant to your orgnisation.

Achieving short-term and sustainable benefits

Most of the benefits of an efficient prevention and detection framework are achievable in the short-term, for each functional level, with sustainable resistance and awareness at the scale of the organisation for ultimate result.

Why PricewaterhouseCoopers?

PricewaterhouseCoopers Luxembourg (www.pwc.com/lu) has about 1,800 professionals from 49 different countries. PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.
“PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.