1. PwC Informations- gold assets

2. 2 Introduction

3. 3 Central and Eastern EuropeGlobal Number of companies that have been victims of economic crime in the last two years Level of economic crime

4. 4 The perceived prevalence of different types of fraud % respondents GlobalCentral and Eastern Europe

5. 5 The financial cost of fraud The average loss per company from fraud – US $2,199,930

6. 6 Economic crime risks of the future GlobalCentral and Eastern Europe

7. 7 Where fraud happens… – Away from Head Office – Outside the mainstream business – In acquired business – In new markets – In bureaucracies – Where management and supervision is poor

8. Description and characteristics of fraud The primary factor that distinguishes fraud from error is whether the underlying action is intentional or unintentional. The most common type of fraud is asset misappropriation. Most fraud tends to be carried out by employees.

9. Description and characteristics of fraud – Red Flags The three conditions generally present in a possible fraud situation are:

10. 10 The nature of Industrial Espionage – All companies are targets, especially high tech industries – All types of proprietary information is stolen – Disloyal employees are the key vulnerability – A lot is probably undiscovered

11. 11 Industrial Espionage – what is stolen? – Information on new products – Details of manufacturing processes – Company operations, budgets, financial statements – Long-range plans and strategies – Technical designs and blueprints – Bid information – Marketing planes and strategies – Research results, formulae, samples – Patent information – Price information – Sales information – Litigation strategies – Personnel information In order of priority, incidents have shown that the fallowing information is targeted and stolen:

12. 12 Industrial Espionage – how are the losses discovered? – Most cases of industrial espionage go undiscovered – Most legitimate companies do not want unwittingly to get involved in “dirty tricks” – Most often, therefore, the victim company is approached by a competitor third party who has been approached by the spy – Most companies suspect they have been victims of industrial espionage only when  former employees start their own businesses  former employees join competitors  their trade secrets turn up in the hands of others

13. 13 A Strategic Approach to Security and Fraud Prevention Objective To improve the organisation`s security and fraud prevention as quickly and cost-effectively as possible, to equal its competitors and satisfy the regulators Scope All assets

14. 14 A Strategic Approach to Security and Fraud Prevention Vision Appropriate protection for all assets in a cost- effective and efficient manner. Competitive advantage, improved customer service and enhanced market image as a result of the organisation`s recognised commitment to the security and fraud prevention. Measurement and compliance techniques to ensure losses resulting from fraud and breaches of security can be identified and reduced over time.

15. 15 Solutions Assess existing & future fraud vulnerabilities Perceive all possible risks of econimic crime Establish policies, procedures and regulations for the protection of possible fraud

16. 16 Risk Management Options – Ignore – Accept – Avoid – Control – Business Continuity Planning – Insurance

17. 17 Risk Management Options HIGH LOW HIGH B C PAVOID ACCEPTCONTROL IMPACT FREQENCY

18. 18 Principles, Policies & Standards – The most important is that prescribed principles and polices are to be followed by all employees Principles Policies Detailed Standards

19. 19 Challenges CORPORATE GOVERNANCE CORPORATE GOVERNANCE TRANSPARENCY LEGISLATION EDUCATION

20. 20 Education

21. 21 PwC Fraud Training Tool Provides appreciation of how to carry out an investigation in a safe environment Gives an insight into how fraud red flags can be identified whilst highlighting potential pitfalls Pursue - Simulated fraud investigation

22. 22 PwC Fraud Training Tool Based on real fraud investigations Television quality pictures and sound Mixes film sequences & actors who can be interviewed With a virtual reality office containing documents and objects that can be reviewed for evidence And it scores your performance! It’s an interactive game

23. 23

24. 24 The Virtual Office

25. 25 Can you search the office for documents?

26. 26 Can you review documents?

27. 27 Can you interview staff?

28. 28 Computer Forensics - examine the PC

29. 29 Identify the Fraudsters – seal their fate

30. 30 Find the Fraudster(s)

31. Your worlds Our people miroslava.milenovic@ yu.pwc.com