News

The ACFE Hong Kong Chapter has been thrilled by the success of our recently completed four-part Investigations Training Workshop. It has been our most successful event ever. The course attracted 168 participants, a record number including members from five other Asian ACFE Chapters in Singapore, Philippines, Malaysia, Indonesia and Taiwan. The continued success of this well-established training programme, run in collaboration with the University of Hong Kong's Centre for Criminology for 10 years, is due in no small part to the high quality of our presented material and the enthusiasm of our members.

Over the four weeks of this course, we were able to offer an outstanding and diverse selection of topics covering the dos and definitely don'ts of due diligence, fraud investigation and governance, the fraud examiner's role in supporting listed companies suspended by the Hong Kong Stock Exchange, the latest post-covid legal developments, cases and remedies for the victims of fraud, and an exploration of digital investigation techniques. We'd like to thank all our presenters for their time and efforts, and all our participants for their enthusiasm and active involvement in this excellent programme. We offer our fraud investigation training programme twice a year on Saturday mornings, with diverse and thought provoking topics presented by experts and specialists to support the professional development of our Hong Kong members and, evidenced by our recent outreach, we now offer this to regionally based CFEs.

If you'd like to join us at our next investigations workshop scheduled for November-December, please look out for announcements on our website, where you will also find information about other forthcoming presentations, including our annual ethics presentation In September, our next breakfast presentation in November and our newly established Young Practitioners' Club.

On 4th April 2022, the ACFE Hong Kong Chapter presented an introduction to fraud investigation to Hong Kong University's undergraduate Criminology class. The Chapter Vice-President Ian Barlow spoke about fraud and the criminal mind, highlighting some of the more notorious and globally recognised scams of recent years and the Chapter President Barry Tong introduced the ACFE Hong Kong Chapter Young Practitioners Club and the ACFE Hong Kong prize.

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