News

The 2021 Annual General Meeting of the Members of the Association of Certified Fraud Examiners, Hong Kong Chapter Limited will be held as a virtual meeting on line on Tuesday, 8th February 2022 at 6:30 p.m.

Please refer to our email for details.

The Association of Certified Fraud Examiners (ACFE) Hong Kong Chapter has established the Association of Certified Fraud Examiners (Hong Kong Chapter) Prize. The HK Chapter is committed to developing the profession and in doing so, the Prize is intended to help HKU undergraduate students to broaden their learning horizons and develop their career path in finance and compliance. ACFE Hong Kong Chapter is a not-for-profit organization holding social and training activities on a regular basis to connect anti-fraud professionals and promoting professional advancement in the prevention, deterrence, detection and investigation of fraud in Hong Kong.

The ACFE HK Chapter has been collaborating with the Department of Sociology and Centre for Criminology, HKU in promoting training and education in the sector. The Prize is hosted by these HKU units. The Department of Sociology has been providing undergraduate Criminology major/minor programmes and taught postgraduate programme the Master of Social Sciences in Criminology, which provides a foundation for advanced research degree studies in the discipline and offers a professional qualification for practitioners in criminal justice and related fields. Working on a similar vision, the Centre for Criminology, has been researching on crime and deviance and offering regular trainings for practitioners in the field.

Details of the Prize are as follows:

Level of study: Undergraduate 
​Faculty/Department: All students with a major or minor in Criminology
​Year of study: Year 3 & 4
​Place of origin: Local Hong Kong students
​Selection criteria: Academic merit and an essay of 500 words (on their interests on fraud related issues)
​Number of awards: Three per year
​Award value: A cash prize of HK$5,000, ACFE (Hong Kong Chapter) training package and one year of post CFE qualification training
Awarding authorities: A shortlist of 15 outstanding students will be invited to submit the 500 words short essay for selecting the awardees.

(The full report can be found from the ACFE website)

COVID-19 has affected — and will continue to affect — the business environment in countless ways. Travel bans, employees working remotely, and an increased reliance on technology and economic uncertainty have become the reality for many organizations around the world. And while these and other hurdles present numerous logistical and operational challenges, they also open the door to the increased pressure, opportunity and rationalization that can lead to fraud.

To illuminate the global pandemic’s impact on the fight against fraud, the ACFE is undertaking a series of benchmarking surveys exploring how fraud risks and anti-fraud programs are changing in the current environment. The December 2020 edition of the Fraud in the Wake of COVID-19: Benchmarking Report summarizes the results of the third of these surveys, which was conducted November of 2020. We hope that the information highlighted in this report will help you understand how fraud risk is evolving and the importance of staying ever vigilant in protecting against its harms in the wake of the novel coronavirus.

2020 will be a year we'd all like to forget, but with the hope of vaccines arriving soon we should be able to look forward to a better 2021.

The heart of the efforts of your volunteer board is always to help support professional development among our existing members, and to encourage a wider community involvement in raising awareness of fraud and its prevention. In normal times we rely on being able to speak to you personally at our breakfast seminars and twice yearly development courses.  The personal contact between our presenters and our audience is a key part of making our presentations such a success. This year we have been forced to try something new through a virtual classroom. The feedback we have received from you and the overwhelming support you've given through your attendance tells us that we have succeeded in very difficult and very experimental circumstances. I am happy to tell you that we have maintained the same number of training events in 2020 as in a more normal year. I want to take this opportunity to thank all our presenters for their efforts in new and challenging circumstances, and to all of those who have attended these sessions for the enthusiasm and commitment you have shown in making these sessions a success.

As we look forward to 2021 we can hope and plan for a return to classroom training and the personal contact our social events contribute to making this such a resilient community. We will be offering a selection of breakfast training events throughout the year and our signature foundation and advanced courses in June and October-November.  We hope that by mid 2021 the community health situation will permit both these two major calendar events to be held at Hong Kong University and for our normal social events to restart. We will also adopt an online registration and PayPal payment system to support our training events, reducing the amount of paperwork for both you and us. We will also be considering how we can further develop and cement our relationship with the University of Hong Kong's Criminology programme and the wider local academic community.  I hope to share more about our ideas in this area later in the year.

To close I want to thank all our board members for their valued contributions in this most difficult of years, and to highlight the contributions of two people without whom none of our virtual classroom efforts would have been possible.  Thanks to Kenneth Lam, our IT specialist for reinventing our classroom, and to Stella Tse, our part-time administrator for supporting us through 2020.

Best wishes to all our members, friends and supporters.  We all look forward to a new and better 2021!

Barry Tong
President ACFE HK

By Kris Lee, CFE
Director and past President of the ACFE Hong Kong Chapter

More than two years ago, Hong Kong Customs & Excise seized a large quantity of counterfeit labelled rice. The case was reported in the local press and by Customs & Excise. The case centred on the counterfeit labelling of an inferior product being sold as a premium product, so big profits for something not really worth the money. I have been thinking about this sort of case for a while, but not from the counterfeiting angle. My interest is in the potential for fraud and corruption in selling these shoddy products into the catering market. I waited until now to write about this case because I didn't want to jeopardise a fraud or corruption investigation.  I've seen nothing published about this since then, so I think it safe think publicly about this now.

Let's start with the bare facts of the case:

1. 15,000 kg of rice was packed in 600 counterfeit branded bags
2. Each sack contained 10% high-quality rice and 90% of a much lower quality
3. Seized separately were 6 tonnes of low-quality rice and 1.6 tonnes of genuine brand high-quality rice ready for packing
4. The rice would have been sold to 100 local restaurants and “cha chan teng”.

The case made me ask myself a number of questions:

1. Why would the restaurants want to buy such low-quality rice in high-quality brand bags?
2. Was the rice sold at normal or below-market price?
3. Would this sale have been a "one-off" transaction or was this part of a regular service? 
4. The supplier operated from a factory in an industrial building in San Po Kong. What would tempt reputable restaurants to buy from a business in a factory building in preference to normal distributors or even a supermarket chain? 
5. Wouldn't restaurant chefs see that the rice was low quality, and what would convince them to use it?
6. Were the restaurants victims or willing participants in the scheme? 

My own answers to these questions failed to convince me as a fraud investigator that this was a simple counterfeit retail product case and that these restaurants were genuine victims. Something extra must have happened to make this product acceptable to restaurants.

If I were the auditor serving these restaurants, should I have spotted something?  In other words, was the restaurant paying too much for the low-quality rice, and why?  If I were an officer of the intelligence team at the anti-graft authority, should I have looked deeper into this?  The easiest way to achieve this would have been to ask Customs & Excise to share their intelligence; this could have led to some interesting graft investigations.

Fraud and corruption have gone underground, and are now more complex and subtle.  The days of open inducements and obvious payments are gone.  Auditors and fraud investigators need to be alert to the signs and small indications of hidden transactions from books and records which might have been deliberately altered.  That is the value of proactive investigation.

The ACFE Hong Kong Chapter is proud to inform our members that our Chapter member Mr. Sudhir Gidwani, has been awarded CFE of the Year 2020. Our Chapter Board of Directors congratulate Mr. Gidwani for his remarkable achievement.

Also, the 2021-2022 ACFE Board of Regents election is imminent.  Beginning November 1 and ending November 30, members will be able to vote online.  ACFE members should have received an email from ACFE President and CEO.

This year, the ACFE Hong Kong is proud to inform our members that a Hong Kong based CFE has been nominated as one of the six candidates.  To learn more about the six candidates, please visit ACFE's website.

ACFE Hong Kong Chapter

Due to an unexpected urgent family matter, Professor Laidler will not be able to conduct the above training session real time on the designated date. Instead, she will record the training in advance and play it to the registered participants via Webex at 9am on 14th November, 2020 as scheduled and will have the online half an hour Q & A session at 12:00 noon on the following Saturday (21 November).

Participants will receive separate web meeting invitations for the above-mentioned training session as well as the Q&A session respectively in due course.

Please accept our apologies should the above arrangements cause you any inconvenience.

Our end of year AGM and dinner event has become one of the most anticipated events in our calendar.  It's a chance to thank our speakers, supporters and members for their involvement and enthusiasm over the past twelve months. This year is different. We won't be able to hold the dinner event this year, and we have also decided to defer our AGM.

Covid-19 prevention measures mean that we can't gather in large groups, and rather than hope that things change in next few weeks we thought it best to tell you about our decision now.  We hope that we can hold our AGM before April next year, and while the government has made a number of concessions to limited companies to support infection prevention, we think it best to delay our meeting so that as many of you as possible have the chance of attending. By then we may even be able to consider organising some types of social event, perhaps including our annual dinner.

As ever we hope for the best and look forward to a better 2021.

Association of Certified Fraud Examiners, Hong Kong Chapter

Back to Basics
We were in a rut. It was 2009 and the Hong Kong Chapter had been in existence for 10 Years. We had a loyal member base of about 300 CFEs and were organising about five training events a year. Our problems were declining income against rising costs for our presentation venues, a static member base and a training offering limited in scope and availability. We needed new ideas and a new direction.

We went back to basics. We quizzed ourselves and our members. 

We started by asking ourselves why the Chapter existed. The answer to that was very close to home. It's in the ACFE Chapter Handbook. The Chapter has two big functions; to "serve the community” and “training”.

We got the same answers from our members, who are our community. They wanted training to be up to date in fraud risk management and they wanted to maintain their accreditation. They also wanted the opportunity to develop their networks through formal and informal events.

Our members liked the breakfast events; they ended early enough not to cut into the working day and by choosing locations convenient to our members we could ensure that we’d get a good turnout and break-even. In 2009 these were our chief source of income. Through our internal board contacts we knew that we could attract outside speakers with expertise in either a topical area of fraud or specialist knowledge in emerging local or global legislation. The breakfast meetings had to stay.  So what else could we do?

Lightbulb Moments
The social aspect of this was easy. We would build on our record of informal evening social events by organising these more often and at venues that would attract members and their guests working in the main business district. We could manage the cost of these events by charging a flat fee to our members and negotiating package deals at the selected venues.

For training we decided that we could expand our training to attract prospective Associate members. Our training plan would retain the aim of presenting at least four breakfast seminars per year, but we would now add something new.

In 2010 we experimented with a half-day conference, leveraging our industry connections to provide speakers and inviting our members to make a modest contribution to fund the event. The event was a success, attracting about 60 participants and generating enough funds to carry us through to 2011. But we needed to do more.

We knew that we weren’t offering training to aspiring CFEs; our breakfast meetings dealt in areas that would interest those already holding a CFE. The talks couldn’t help them prepare for the exam and didn’t cover local legislation or practices peculiar to Hong Kong and outside the core syllabus.  Our first thoughts were to invite ACFE headquarters to run training courses locally. We are half a world away from Texas and we found that the cost of running a course like this with visiting tutors was too much for individual candidates to bear. Our Chapter funds were limited and we weren’t able to part sponsor such a course. Our second idea was to run an exam training course ourselves. We soon realised that creating and presenting a course covering all the required disciplines adequately was beyond the capacity of our volunteer board.  We just didn’t have the time to prepare the materials and it would require a big time commitment from both the board and the prospective students. We eventually decided to narrow our focus. We would concentrate on providing locally focused training that catered to both candidate and qualified CFEs.  But how?

Our lightbulb moment was to link this idea to expanding this training beyond the narrow field of financial and legal services. In 2009 our member base was drawn from banks, accounting firms and companies employing a security or compliance professional. But what about those with a professional interest in studying criminal behaviour? We approached Centre for Criminology of the University of Hong Kong and we found like minded people who wanted to expand out of their academic envelope to understand white collar crime in one of the world’s major finance centres. We partnered with the university to offer two training packages a year. We called these courses “Foundation Training” and “Advanced Training”.  There were clear benefits for both sides that went beyond the financial stability this arrangement offered. It would burnish the reputations of both participants by showing initiative to move out of the comfortable limitations of their professional existences. Each course would run for three hours on four consecutive Saturday mornings in the purpose built lecture theatres of the university with a capacity for about 100 students. We aimed to recruit specialists from across the broad spectrum of fraud topics who would have sufficient time in a three hour window to explain their subject in detail. Our contributors included university law and criminology professors, IT specialists, forensic accountants and forensic scientists and representatives from government departments handling specialist fraud and money laundering prosecutions. We opened up the courses beyond our member base to university students, local security associations like ASIS International, and other financial services associations, like HKICPA (Hong Kong Institute of Certified Public Accountants).  The courses were priced at a level that covered our costs, while staying well below commercial rates for similar local training events. We didn’t limit or pre-qualify attendance, but those outside our magic circle paid a slightly higher rate. Each student would receive a certificate of attendance jointly certified by the Chapter and the University of Hong Kong. With the approval of ACFE HQ we were able to offer CPE points for these courses, just as we would normally do for our established breakfast seminars. 

There were now a potential 24 CPE points available to members through our two university partnered training courses, plus an additional 8 CPE points from our breakfast events. This supported our community with relevant training offering more than a full yearly quota of CPE points at an affordable price, and had the potential to place the Chapter’s finances in a more healthy position. 

Success
The plan was a hit.  It was clear within the first year that we had a good recipe. We have now been running this training model very successfully for ten years.  Each event has been over-subscribed (limited by the safe seating capacity of our venues) to the extent that we have had to introduce waiting lists. The quality of our events has now attracted speakers from outside Hong Kong, and overseas presenters are now willing to plan business trips to Hong Kong to coincide with our events.

Community Support
The success of our training plan has allowed us to fine tune our internal management structure.  We can now afford to employ a part-time (and very efficient) administrative assistant, who manages course and event registrations, venue arrangements and certifications. We previously levied a nominal membership charge for the local chapter and have now scrapped this. It was a source of friction with local members. Why pay for something that I have already paid for in joining ACFE? A fair point and it was always an uphill task to explain that we were a group of volunteers operating an association without financial support from our parent organisation. It was an easy decision to give up a charge that cost nearly as much to administer as the income it produced. And the biggest change is that we can now afford to fully subsidise our social events, including social drinks three to four times a year plus an annual end of year dinner and AGM.  All at no extra cost to our members.

We now approaching 1000 local members and celebrated our 20th anniversary in 2019 by organising a half-day conference at which we were able to attract senior representatives from commercial and government organisations as key speakers. Again a sell-out event.

The Future’s so Covid
What’s next?  Our plan for 2020 envisaged an expanding level of connection with other local universities and commercial organisations, looking to partner beyond our existing arrangements and offer training and development that would benefit our member base and their professional development. Except...except....along came Covid-19. Our plans have been put on hold. We can’t expect to develop our connections at a time of very limited social inter-action. We have fallen back on technology. We can still offer breakfast seminars and our signature twice yearly Saturday training courses, but these are now run using web conferencing. Another hit, and without the constraints of seating capacity limits we can accommodate all comers.

We are surviving in a virus hit world. We know we have a model for success that can cope with disruption and can adapt to unpredictable events. It isn’t what we expected or wished for this year, but we now know that we can survive financially and that we have the support of our Chapter community. We are optimistic about 2021. 

ACFE Hong Kong Chapter

ACFE released the 2020 edition of the Report to the Nations. This year's report is the 11th edition and is the most comprehensive global study to date. With data compiled from 2,504 real cases of occupational fraud investigated by CFEs in 125 countries throughout the world, the report continues to be a tremendous resource for those interested in how occupational fraud is committed, how it is detected, who commits it and how organizations can protect themselves from it.