In the eyes of many international watchdog groups, the Czech business scene is corrupt to the core. However, senior manager for investigation and forensic services at PricewaterhouseCoopers (PwC), Josh Ellis, tells The Prague Post how recent publicity surrounding fraudulent activities is actually an encouraging sign that organizations are improving their ability to detect economic crime. He also talks about how difficult it is for a British citizen to learn Czech.

1. You are an expert in forensic services. In your position, do you feel like a consultant to customers or a private detective hired by companies to discover their weaknesses?

While there is a tendency to assume that we all loiter in dark alleys wearing trilbies and trench coats, the truth of the matter is that we consider ourselves more as objective fact-finders. Our role is to assist our clients in collating and identifying the facts in order to facilitate their making an appropriate reaction to a given incident. In this regard, I feel that we tread a middle line between the two extremes of consultant and sleuth, in order to help our clients develop suitable strategies when dealing with fraud and its prevention.

2. Forensic technologies help corporations to monitor, track and investigate suspicious behavior throughout their IT systems. Given the low market exposure to forensic technology solutions, do you think a most organizations even understand these services?

The concept of forensic technology solutions is not a new invention. It is a new extension of PwC's dispute analysis and investigations [forensic services] team and acknowledges that increasingly evidence of white-collar crime is found within information systems. Forensic technology is a means by which we can capture, extract and analyze this information in order to support an investigation, arbitration or any other dispute or financial review. There is an increasing need for all reviews, audits and investigative work to include technological means to interrogate the huge volumes of data that reside within the systems.

3. Have you found a significant difference in the involvement of forensic technology solutions in projects between the Czech Republic and other European Union states?

Forensic technology solutions is a relatively young discipline in the Czech market, and as such, if I compare it to a [somewhere] such as the UK, then there is a clear difference. However, it was not many years ago when the UK forensic technology solutions practice was of a similar size to where we are now. On the other hand, if we consider other EU states, for example Austria, the market for forensic technology solutions is not as developed as it is here. I believe that considering the age of the practice, the appreciation of the benefit it can bring to the Czech market is extremely encouraging.

4. PwC plans to establish forensic technology labs across the Central and East European region. What are your expectations?

There are two major goals associated with the establishment of specialized forensic technology solutions labs across the region. The first is to enable the forensic technology solutions team to simultaneously support multiple cross-regional projects in the most efficient manner, using the latest technology. The second is to provide assurance to our clients that the data we process to support their needs is held in an environment that has strong physical and logical security measures in place to protect the data and to comply with the relevant data privacy laws.

5. How much faith in IT security do you find in this country? Do you think there's still a lot of people and businesses that are skeptical about it?

I do not see IT security awareness as something associated with a country. From the organizations that I have observed in the Czech Republic, the awareness of IT security has ranged from the 'fire-fighting' model to a more mature one, in which IT security is an integral part of corporate governance. I would, however, say that many organizations and individuals, regardless of their country, work on an 'it will never happen to me' basis until they experience an issue in this area. Obviously, prevention is better than cure.

6. The Czech Republic is often criticized as having a high level of corruption and a nontransparent business environment. Are these statements you would agree with?

There is a common misconception amongst people that the Czech Republic harbors a significant portion of Central European crime. In the most recent PricewaterhouseCoopers economic crime survey, we found that in the Czech Republic the perception of corruption and bribery far outweighs the reported number of incidences. Fifty-three percent of respondents perceived corruption and bribery as the greatest threat. However, not one company reported a single incidence of such activity! In my experience, the truth lies somewhere between the two.

7. I recall that in that survey, you highlighted an increase of fraud incidences in the Czech Republic from 20 percent to 27 percent over a two-year period. Does this mean that fraud is an increasing problem?

While at a first glance it may appear that the situation is getting worse, I actually believe that an increase in detected fraud incidences in the short term is an encouraging sign. What we have seen in the Czech Republic is an effort by organizations to demonstrate greater transparency and better governance — including areas such as fraud mitigation. Most companies have achieved this, at least partially, with the introduction of stricter controls and risk-management policies, which have resulted in an increase in reported frauds. Similarly, over time, the ability of organizations to detect economic crime is improving owing to greater awareness of fraud-prevention measures. This has also resulted in previously undetected incidences being identified and thus reported.

8. You've worked in countries ranging from Great Britain to Turkey and Romania. If you compare the business environments in those countries with the Czech Republic, do local auditors have an easier or more complicated life here?

I think that the complexity of the auditors' role has changed since I first came here. There are increasing complexities involved with ensuring that audit clients are in line with the extraterritorial requirements such as the U.S. Sarbanes-Oxley Act and areas of U.S. legislation such as the Foreign Corrupt Practices Act, which impacts subsidiaries of listed companies, wherever they are located. With the introduction of International Financial Reporting Standards and the EU 8th Directive, we will see greater harmonization across Europe — and greater complexity in countries such as Romania set to follow in the future. While these requirements are designed to ultimately assist the external audit process, there are many teething troubles that need to be dealt with in order to ensure effective implementation and compliance.

9. You've studied in England and Japan and worked in Britain, Turkey, Romania, Croatia and other places. Is there anything new that you've learned since you arrived here?

Aside from discovering that Plzensky´ Prazdroj is a fantastic beer, I would say that that the key thing that hit me was that the Czech sense of humor reminds me of the sometimes quirky English sense of humor. It would never have occurred to me that it could be so similar.

10. You say you have picked up some Czech. What was most difficult about learning this language?