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

Financial crime can heavily impact companies 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 practices (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 fraud and bribery accusations 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:

• in using improper accounting practices with various objectives (revenue increase to match market expectations and achieve individual goals;
• 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 independence 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:

• how to react in case of crisis;
• what the pitfalls in terms of decisions are.

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.

Michael leads PwC’s Forensic Services practice and AML taskforce, overseeing investigations, remediation projects, and high-profile AML audits for banks and investment funds. He is the key contact for AML distribution due diligence in asset management and works closely with PwC’s global forensic network on international projects. As certified fraud examiner, Michael is recognized as an AML and forensic expert and actively contributes to industry working groups on fraud at the Institute of Internal Auditors (IIA) and the Institut Luxembourgeois des Administrateurs (ILA). He regularly conducts workshops and training on AML and fraud in Luxembourg and abroad.