More than one-fourth of senior executives in Singapore feel it is justifiable to misstate financial performance in order to survive an economic downturn

June 17, 2014 Leave a comment

PUBLISHED JUNE 12, 2014

More execs say it’s OK to misstate financials

MICHELLE QUAH

MICHQUAH@SPH.COM.SG   @MichelleQuahBT

More than one-fourth of senior executives in Singapore feel it is justifiable to misstate financial performance in order to survive an economic downturn. The staggering statistic was one of many in EY’s 13th and latest Global Fraud Survey. – PHOTO: SPH

[SINGAPORE] More than one-fourth of senior executives in Singapore feel it is justifiable to misstate financial performance in order to survive an economic downturn. The staggering statistic was one of many in EY’s 13th and latest Global Fraud Survey.

The exercise, which involved 2,719 interviews with senior decision-makers in the largest companies in 59 countries – conducted between November 2013 and February 2014 – looked at the perceived levels of fraud, bribery and corruption across the world in current times.

It found that financial statement fraud risk is still prevalent. Aside from Singapore’s response, EY’s survey found that – across the globe – 6 per cent of respondents said that misstating financial performance is justifiable in order to survive an economic downturn. This is an increase from 5 per cent two years ago.

EY noted that this is driven by responses from emerging markets where, in some jurisdictions, a significantly higher proportion of respondents stated that they could justify such actions. Compared with Singapore (28 per cent), 24 per cent in India and 10 per cent in South Africa felt misstating financial performance was justifiable.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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