Procurement Fraud - Financial Pre-Qualification
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Procurement Fraud - Financial Pre-Qualification

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ProEdge Global Sdn. Bhd. ...

ProEdge Global Sdn. Bhd.
Suite: 33-01, 33rd Floor,
Menara Keck Seng,
203 Jalan Bukit Bintang,
55100 Kuala Lumpur, Malaysia.
Tel : +603-2116 5671
HP : +6016-338 9783
kenneth@proedgeglobal.com

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  • 1. Knowledge is Empowering A practical and hands-on training from the No.1 Fraud Buster in Asia Pacific region : © ProEdge Global Advanced Procurement Management Series Advanced Procurement Management : The Pre-Qualification - Financial Analysis of Suppliers 11th & 12th March 2014 Parkroyal Hotel, Kuala Lumpur INCLUSIVE OF Tommy Seah’s New Book on “Psychology of Fraud” for registered & paid participants before 29th Jan 2014 “ The financial health of a Supplier is important to any procurement situation. The larger the contract, the more critical the purchase, or the longer term of the agreement, the more important it becomes. “ You might be wondering why we are inviting the Number 1 Fraud Buster on Procurement Fraud to discuss financial analysis of suppliers, the answer is what you find in your analysis of the Supplier’s financial health can have a material impact on your procurement decision. Knowledge of Suppliers financial health may show the need for additional terms or requirements need to be added to your contract to protect against the fraud risks you have in using them. It may also provide you with information that you can use as leverage as part of advanced negotiation to gain concessions. In order for the participant to understand the all these issues on procurement, we have invited ACFE Regent Emeritus Tommy Seah to conduct this premier program on the financial pre-qualification of suppliers. This is a very fast moving and thoroughly enjoyable presentation. Not a dull moment. There is no pre-requisite of financial knowledge other than a desire to have a grip on the subject matter. Participants must not be confused between prequalification and a tender for a contract. The two are not the same and the difference between the two is explained here. Prequalification is not a form of tendering. Prequalification when used, precedes the tendering for the actual contract. Prequalification is used to identify contractors who would be allowed to tender for certain contracts. Therefore an advertisement for prequalification does not amount to an advertisement of a tender for a contract because all the former does is allow those interested to express their desire to be eligible to tender. Once a company is pre-qualified for a particular contract it is then eligible to tender for that contract. A firm applying for prequalification has no expectation to be awarded any contract on the basis of the application for prequalification. Its only expectation is that once it has been approved for prequalification, then it is free to bid for the contract. Prequalification therefore precedes the tender and an advertisement for prequalification should not be confused with an advertisement inviting tenders for the award of the substantive contract. Prequalification is not used for all contracts. In fact, it is only used in certain cases where it is felt necessary to do so. YOUR COACH : Tommy Seah FCPA, FAIA, MSID, ACIB • Certified Fraud Examiner (CFE) • Regent Emeritus, ACFE (Texas, USA) • Vice-Chairman 2006, ACFE Board of Regents • Chairperson, CSI World Headquarters • World Class Financial Mgt. Expert • Double Firsts in Financial Management and Accountancy (U.K.) • Chartered Banker, International Accountant, Auditor, Investigator • Member of Advisory Board to SOX Institute (N.Y.) Another Event Proudly Organised by ProEdge Global Sdn. Bhd. (PSMB Registered Class C Training Provider) For registration and enquiries, please contact our Program Manager KENNETH : Email : kenneth@proedgeglobal.com Tel : +603 2116 5671 Fax : +603 2116 5999 Web : www.proedgeglobal.com
  • 2. Advance Procurement Management The vast majority of contracts are publicly advertised without the need for prequalification which is often reserved for large contracts and those with requiring highly technical expertise. One of the advantages of prequalification is to reduce the need to evaluate unqualified contractors. It is way of narrowing the field to only those who have the requisite ability to comply with the terms of the contract and the financial capability to undertake the work. Thus for certain contracts, particularly large contracts or those involving highly technical work, a procurement entity will before advertising for bidders for the contract, first ask for invitations for pre-qualified bidders. Prequalification allows for unqualified bidders to be weeded out and thus helps to speed up evaluation of bids since only a limited number of pre-qualified bids have to be examined. This means that only those firms pre-qualified would be eligible to bid on the contract. The prequalification is merely for companies to demonstrate that they have the ability to undertake the work or supply of whatever it has to be sourced. One of the most common problems with performing financial analysis of Suppliers is when they are privately held and are simply unwilling to disclose their financial information. When faced with that we may offer them three choices 1. They can disclose under confidentiality agreement. 2. The procurement team will provide them with certain ratios that we need them to have their Certified Public Accountant certify that they are better than all of the individual ratios provided. 3. The procurement team will either not source from them or will give them very limited business as the risk cannot be quantified. The financial health of a Supplier is important to any procurement situation. The larger the contract, the more critical the purchase, or the longer term of the agreement, the more important it becomes. The reasons for that are simple. The better the Supplier’s financial health, the more likely the procurement officer will be able to reduce cost. Financially stable Suppliers will provide committed or improved performance, and have predictable deliveries and performance. It is critical for Procurement Officers to invest significantly less time and effort managing financially stable suppliers. Moreover using stable supplier should need fewer requirements to manage against performance risks. For example, with a Supplier that is financially unstable, as protection you might need to negotiate licenses and escrow in the event the Supplier starts to fail financially. The procurement officer might dual source the item, which will cost more because volumes are not maximized and because instead of having to manage one supplier the procurement officer ended up managing two. Needless to say, the best suppliers will be profitable and will have sound financial management. By reviewing the suppliers financial statements it allows the procurement officer to ask questions or learn information that will also be useful in the negotiation. So like other aspect of prequalification the procurement officer need to not just look at whether or not they will be qualified but should also be considering the impact on cost and be looking for information that can use in the negotiation. ■ Who Should Attend • Purchasing / Procurement Managers • Supply Chain / Logistic Managers • Risk Management & Regulatory Managers • Contract Managers • Buyer / Sourcing Managers • Materials Managers • Chief Financial Officers • Chief Investigators • Investigators • In-house General / Legal Counsels • Legal & Compliance Managers • Internal Auditors & Audit Managers • Finance Managers / Controllers • Accountants • and Independent / External Auditors www.proedgeglobal.com Some of world’s leading government linked companies, banks & financial institutions staff trained by Tommy : • Malaysian Airport Holdings Bhd • The Government Investment Corporation of Singapore • The Stock Exchange of Singapore • Deutsche Bank (participants from 40 countries) • Westpac Banking Corp • Monetary Authority of Singapore (Central Bank) • United Overseas Bank (UOB) • BNP Paribas • Bank of China (China-wide) • Hong Kong and Shanghai Bank • OCBC Ltd • Bank Negara Malaysia • MayBank • Bank Islam • TNB • Philip Morris • Bangko Sentral ng Pilipinas • Bursa Malaysia • Securities Commission Malaysia • UMW • F&N • and many more... Some Comments from Past Delegates : • “The subject matter was well presented and at a suitable pace.” - Manager, BNP Paribas • “The way the program was conducted - Lively Able to keep one’s attention.” - Head of Internal Audit, Credit Lyonnais • “Interesting, informative and lively presentation” Investigation Officer, Inland Revenue Board (IRB) ■ Course Schedule 0830 0900 1030 1045 1230 1330 1515 1530 1700 Registration & Morning Tea Workshop Commences Refreshments & Tea Break Session Commences Networking Lunch Session Commences Refreshments & Tea Break Session Commences Course ends For registration and enquiries, please contact our Program Manager KENNETH : Email : kenneth@proedgeglobal.com Tel : +603 2116 5671 Fax : +603 2116 5999 Web : www.proedgeglobal.com
  • 3. Advance Procurement Management Program Outline Financial Pre-Qualification of Suppliers requires a grip on the following : • Understanding Suppliers financial statements • Analyse the financial health of a Supplier • Determine the financial health of Suppliers using the structural approach to Balance Sheet analysis • Determine the past performance of Suppliers by understanding the contents in the Income statement (P&L) • Calculate critical business performance indicators and compare them against the best in their industry and location. • Understand the limitations of a fully audited, unqualified financial statement as of the end of the last fiscal year, CPA prepared. • Applying the data in Unaudited interim financial statements • Using the Working Capital Cycle to negotiate for a better term • Understand The opinion letter from the CPA. • Understand the significance of Notes to the financial statement to determine any false or exaggerated statements • Understanding 5 most schemes in Suppliers Financial Statement Fraud Disclaimer “Due to the interactive nature of the learning session, the sequence and contents of the program maybe vary according to the needs of the participants. The speaker reserves the right and the privilege to conduct the program in the manner which he thinks to be in the best interest of the majority of the participants. Please ensure that you understand this completely so as to prevent any form of unrealistic expectation and or disappointment in a public enrolment program that was not tailored to your specific need. Please inform the organizer in advance if you are not agreeable or do not completely understand the above term and we will review your enrolment accordingly.” www.proedgeglobal.com Your Coach Tommy Seah, FCPA, FAIA, MSID, ACIB, • The only Regent Emeritus of the Association of Certified Fraud Examiners (ACFE) within the Asia Pacific • Vice-Chairman 2006, ACFE Board of Regents, (Texas, USA) World Headquarters • Chairperson, CSI World Headquarters Chartered Banker, Accountant, Auditor, Investigator, Fraud Examiner Tommy is someone you will want to know in person. Not just because he is the elected Vice Chairman (2005/07) of The Association of Certified Fraud Examiners Board of Regents based in Texas, USA. Or the fact that he being the only Regent Emeritus in Asia is very often referred to as the Number One Fraud buster. It is him that you want to know. It can very often be a defining moment for some and a life transforming moment for others. He motivates you to do great thing without even trying. Somehow your day become so much better just because he is talking to you. It is not charisma. He is frank to the point of being blunt. He is able to cut through all the smoke and see things as it is. But being a practicing CFE which is is a post graduate professional qualification recognized by the FBI and USA Central Intelligence Agency in its recruitment of auditors for combating fraud does not hurt. His services in providing technical training is much sought after continuously by numerous banks in the region, including Germany, Singapore, Malaysia, China, Indonesia, Philippines and Taiwan. Tommy’s previous experience includes systems based auditing in an American International Bank, where he was the Senior Regional Auditor responsible for the Bank’s audit in the Asia Pacific region. He has also held the top executive position of Chief of Internal Audit in a prime offshore bank where his audit duties cover the Singapore and Hong Kong operations of the bank. He covers all areas of the bank’s audit of operations and IT systems. He also has practical working experience in the Operations Department of a foreign bank. Tommy is the author of 8 banking books including The Key to Malaysian Financial Institutions Compliance & Economic Crime Requirements Published Online by John Wiley : 5 JAN 2012 DOI: 10.1002/9781118269213.ch71. His publications has received excellent review and first class commendation from some of the most authoritative professional certification body & top rated banks in the world. His latest 2014 publication is The Psychology of Fraud – Understanding Gender Bias. For the past thirty years, Tommy Seah has trained some of the top banks and financial institutions in the region. In particular, his expertise in SOX 404, AML and Basel II systems implementation is much sought after by financial institutions and banks in Germany, Brunei, China, Indonesia, Malaysia, Philippines, Singapore, Taiwan and Thailand. His prolific training career has seen him trained over many CFOs, Compliance Officers, Auditors, Risk Managers, fraud investigators, financial analysts, forex managers, IT Professional, legal counsels, private bankers and accountants. Today, he is still a very much a hands on practitioner doing Independent Third Party work for audit practice assurance, compliance review & fraud investigation in the Asia Pacific Region. He is also a Certified SOX Professional & appointed as Professor of Economics of the CHINA Institute of Directors.
  • 4. Advance Procurement Management : The Pre-Qualification - Financial Analysis of Suppliers www.proedgeglobal.com BOOKING REFERENCE: CFE 3909 Investment Sales Contract How To Register □ RM 3680 for two-day workshop □ Early Bird Price - RM 3380 (RM 300 off from normal price) (Payment & registration received before 29th Jan 2014) □ Premier Group Discount - 15% off from normal price for 3rd participant onwards from the same company. Indemnity: Should for any reason outside the control of ProEdge, the venue or speakers change, or the event be cancelled due to an act of terrorism, extreme weather conditions or industrial action, ProEdge shall endeavour to reschedule but the client hereby indemnifies and holds ProEdge harmless from and against any and all costs, damages and expenses, including attorneys fees, which are incurred by the client. The construction, validity and performance of this Agreement shall be governed in all respects by the laws of Malaysia to the exclusive jurisdiction of whose Courts the Parties hereby agree to submit. Contact ProEdge Global on Tel: +603 2116 5671 or +6016 338 9783 Fax: +603 2116 5999 Email: kenneth@proedgeglobal.com OR brenda@proedgeglobal.com Workshop Information Date : 11th & 12th March 2014 Venue : Parkroyal Hotel, Jalan Sultan Ismail, Kuala Lumpur, Malaysia Our Address ProEdge Global Sdn. Bhd. Suite 33-01, 33rd Floor, Menara Keck Seng, 203, Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia. Payment Method Please Complete This Registration Form And Fax It Back To KENNETH on +603 2116 5999 Payment is required within 5 working days upon receipt of invoice Cheque: Made payable to ProEdge Global Sdn. Bhd. Bank Transfer: ProEdge Global Sdn. Bhd. CIMB Bank, The Curve, Mutiara Damansara Branch Account number: 1246-0000-4621-01 Please quote our invoice No. Name : Position : © Copyright ProEdge Global Ltd. 2014 ProEdge reserve the right to alter program & speaker details. Email : Name : Confirmation: Once payment has been received a receipt will be issued. If you do not receive a letter with joining details please contact our Operations Coordinator. Position : Email : Name : This Course is Available for In-House If you have a number of staff in your organisation who requires training, ProEdge also offers fully customised inhouse training programmes. Position : Email : To find out more, please contact Kenneth on (+603) 2116 5671 or email kenneth@proedgeglobal.com for more information. Organisation : Address : Important Notice Postcode : Tel : Fax : Authorisation Name : Designation : Signature : Date: / / * Booking cannot be processed without a signature. Invoice To (Name): Email : 1.Fees are inclusive of program materials, lunch, refreshments & certificate. 2.Payment Terms: Following completion and return of the registration form, full payment is required within 5 days from receipt of invoice. PLEASE NOTE: Payments are required with registration and must be received prior to the Coaching Session to guarantee your place. Walk-in delegates will only be admitted on the basis of space availability at the Coaching Session and with immediate full payment. Due to limited conference space, we advise early registration to avoid disappointment. 3.Cancellation/Substitution: If you are unable to attend, a substitute delegate is welcome at no extra charge. Please provide the name and the title of the substitute delegate at least 2 days prior to the program. A refund less 10% administrative charge will be made for cancellation received in writing 10 working days before the program date. A complete set of program documentation and a 50% refund will be given for cancellation made 3 working days before the program date. Regrettably, no refund can be made for cancellation made on and/or after the program. A complete set of documentation will however be posted to you. The organizer reserves the right to make any amendments and/or changes to the program, venue, speaker replacements and/or topics if warranted by circumstances beyond its control. If, for any reason, ProEdge decides to cancel or postpone this coaching session, ProEdge is not responsible for covering airfare, hotel, or other travel costs incurred by clients. The conference fee will be refunded. Event programme content is subject to change without notice. 4.Copyright etc: All intellectual property rights in all materials produced or distributed by ProEdge in connection with this event is expressly reserved and any unauthorised duplication, publication or distribution is prohibited.