Risking it all? - How to manage financial crime risks at executive and board levels

Financial crime can impact companies heavily and even ruin them. How should a company and its advisors respond to allegations that senior managers have been involved in fraud, bribery or corruption?

The case study 'Risking it all' is an interactive simulation of the deliberations during a meeting of senior directors as they seek to deal with whistleblower allegations of fraud and bribery by some of the company’s employees. The scenario depicts the potential consequences should an investigation of this type be approached in the wrong way or otherwise seriously mishandled. Among its many learning points, it covers the importance of conducting an independent investigation, the scope of the investigation and what would constitute appropriate and inappropriate action.

This case-study will lead to discussions on available options and guidance of best pratices (Dos and Don'ts). This session is facilitated by members of PwC's forensic investigations team.

By the end of the training, participants will be able to:

• understand the importance and the scope of conducting an independent investigation while facing frauds and bribery within their organisation
• know what would constitute appropriate and inappropriate action
• be aware of potential consequences should an investigation of this type be approached in the wrong way or seriously mishandled

The case-study highlights and illustrates the multiple temptations of senior company executives:

• i. in using improper accounting practices with various objectives (revenue increase to match market expectations and achieve individual goals;
• ii. in bribing other corporate or government officials to ensure the gain of lucrative contracts.

Ignoring such issues introduces the possibility of financial statements adjustments, regulatory or criminal prosecutions, other lawsuits, disbarment from government tendering, a beaten down share price and a destroyed reputation.

It is the responsibility of the audit committee to fully capture the company business and the global group chart (local and international). For multinational where the risk is greater, it is a must to promptly enquire as soon as the smallest sign of irregularity is detected. Don't forget your independance and personal liability.

As per the latest EU Directive, a specific reporting framework is required in the context of whistleblowing.

It is critical for the audit committee, the senior management and the auditors to know:

• i. how to react in case of crisis;
• ii. what are the pittfalls in terms of decisions.

The case-study will highlight the various available options, will present the Dos and Don'ts.

This training is coordinated by Michael Weis, Partner at PwC Luxembourg.

Through his previous positions and projects, Michael, Financial Crime Leader and Partner in the forensic services, gained extensive knowledge in the investment management and banking industries.

As a key member of the internal controls practice of PwC Michael specialises in the review of internal controls in the context of SAS 70 reviews and controls reports. He is the manager of various high-profile client assignments on internal controls reports and on Anti-Money-Laundering (AML) in the investment management industry.

Within PwC, Michael takes a key role in the AML taskforce and on internal controls work for the prevention of financial crime. He is coordinating the PwC’s Academy's “Fight against financial crime” leading training programme that regularly involves international subject matter experts (e.g. transparency international, UN Security Council, FATF, SCPC, FSA, CSSF etc.). Through his professional qualifications he specialised in compliance related topics such as internal controls frameworks, fraud prevention/investigation and AML.