Compliance Risks Arising from the Decentralization of Internal Oversight in Multinational Enterprises: The Case of AstraZeneca China’s Insurance Fraud

In recent years, compliance issues have frequently been exposed among multinational enterprises (MNEs) in emerging markets, drawing wide attention to the effectiveness of their internal control and regulatory mechanisms. Especially in the context of accelerating decentralization and “local authorization” strategies, how to balance global compliance standards with local governance realities has become one of the core challenges in cross-border operations. This study takes the AstraZeneca China insurance fraud case as the starting point to examine the mechanisms of compliance risk and institutional vulnerabilities faced by MNEs under dispersed authority and cultural differences. Through a systematic review of the incident, in combination with relevant literature on corporate governance, compliance management, and cultural accounting theory, the paper reveals that regulatory failure often stems from information asymmetry, incentive bias and oversight blind spots between headquarters and local subsidiaries—problems that are particularly pronounced in contexts characterized by high power distance and weak disclosure cultures. The research further found that without embedding effectively culture-sensitive mechanisms, MNEs’ “local authorization” strategies may fail to improve governance efficiency and, instead, amplify systemic risks of local misconduct. This analysis enriches the theoretical perspective on culture and compliance in multinational governance and offers policy implications for building more resilient and adaptive global compliance frameworks-emphasizing the need for a dynamic balance between global consistency and local adaptability.