The post originally appeared on Robin Singh’s Blog,whitecollarinvestigator.com.
Regardless of industry, bribery and corruption remain widespread problems, resulting in barriers to both social and economic stability, particularly in developing nations. Carrying out an anti-bribery investigation is vital to identifying as well as preventing the presence of corruption. Unfortunately, many organizations remain vulnerable to corruption, often due to a company culture that either ignores or, even worse, accepts the presence of fraud, corruption, and bribery. There are no quick fixes or one-size-fits-all solutions when it comes to developing an anti-corruption compliance program. Even so, the elements listed below will provide a firm foundation for developing an effective anti-corruption compliance program.
How To Start An Anti-Bribery Investigation In General
The cornerstone of any successful anti-bribery investigation is good management. Fraud investigations must be planned and managed efficiently. First and foremost, it is important to determine what it is that you wish to achieve with an anti-bribery investigation. Rather than simply determining what may have happened, it is important to collect information, as well as take action with that information. It is not simply enough to punish anyone who may have perpetrated fraud. It is also vital that your anti-bribery investigation is framed in a way that will prevent any further damage from being conducted.
How Do You Validate A Bribery Allegation To Commence An Investigation?
Validating an allegation for bribery in order to commence an investigation can be challenging, so it is important for the investigator to take great care. In a situation in which a witness may have admitted paying a cash bribe, for instance, and there is no other direct evidence, it might be necessary to observe the following steps:
- Record in detail, including where, when, why, and how the witness paid the accused in cash, in order to obtain direct evidence.
- Prove that the accused deposited or spent a significant amount of cash within a short period after he or she allegedly received the bribe.
- Eliminate all other possible sources of income for the accused’s deposits or cash expenditures to whatever extent possible.
- Interview the accused and demonstrate that he or she cannot explain the source of the deposits or cash expenses.
Top 5 Ways To Profile A Sales Or Procurement Person During A Reactive Anti-Bribery Investigation
Sales and procurement personnel are most often at risk for bribery and other forms of fraud. When conducting a reactive anti-bribery investigation, it is important to profile such personnel to identify the potential for bribery. Possible red flags might include:
- Providing gifts, money, or entertainment in order to increase sales, make a deal, or gain a competitive advantage.
- Insufficient guidelines or policy detailing acceptable hospitality, gifts, or entertainment expenses.
- Making deals with suppliers to award a contract/sale or fix prices.
- Recurring or new sales or long-term contracts without proper negotiations and bidding.
- Payments of cash to facilitate deals.
How Do You Profile Other People In Contact With Sales And Procurement People? Can They Also Pose A Risk For An Organisation?
It should also be recognized that sales and procurement personnel are not the only individuals who may be at risk for committing bribery and fraud. Other individuals in contact with sales and procurement personnel may also pose a risk for your organization. Incentives, pressures, and opportunity can all create the risk for abuse inside the procurement cycle. Therefore, it is just as important to profile those individuals in order to determine the true level of risk for both monetary losses as well as damage to your organization’s reputation. Possible red flags might include:
- Lack of control surrounding bidding prices
- Round dollar value invoices
- Poor expenditure documentation
- Off-hour transactions
- Poor cash management practices
What Are The Top 5 Elements Required To Prove In An Anti-Bribery Investigation When There Are No Laws Like FCPA or UKBA In A Country?
In situations in which there is a lack of laws to govern anti-bribery, such as UKBA or FCPA, it is vital to ensure the ability to prove five vital elements. Those elements are:
- Direct proof of a bribe
- Indirectly proving illegal income
- Concealed or fraudulent transactions
- Mutual legal assistance
- Informal or formal cooperation
What Are The Top 5 Circumstantial Evidence On Has To Look For When There Are No Witnesses?
Intent or circumstantial evidence in a bribery or corruption investigation might include a number of elements, including that the subject of the investigation, or someone acting under his or her direction, deliberately:
- Destroyed a relevant document.
- Forged or altered a relevant document.
- Lied to investigators regarding a material point in order to cover up actions.
- Obstructed the investigation in some way.
- Committed prior similar acts, thus demonstrating that the acts under investigation were conducted in a knowing and willful manner.
What Are The Top 5 Corrective Measures That One Can Take To Correct The Situation After A Breach Has Been Identified?
Following the identification of a breach, it is vital that the organization take immediate steps to implement corrective measures, such as the following:
- Strengthen supervision by increasing support, resources, and management oversight.
- Customize financing operations more closely to meet the risk profile and needs of clients and vendors.
- Consolidate multiple rules to provide clearer guidance.
- Review lines of accountability at both staff and management levels.
- Introduce incentives to communicate expectations to staff.
How To Set Corrective Measures In An Investigation When No Evidence Has Been Identified And Only Minor Indicators Have Been Found To Support The Allegation?
Even in situations in which only minor indicators are found to support an allegation of bribery of fraud, it is important to take corrective action, including the following:
- Risk assessment
- Participation by all levels of the organization to set the tone at the top that bribery will not be tolerated
- Written policies and procedures
- Implementation of a recognized reporting mechanism
- Training for all employees and third parties
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Robin Singh has worked in the Big 5 accounting firms such as Deloitte and Protiviti, managing their Forensic and Dispute service line across jurisdictions such as India, Singapore, Middle East and Afghanistan. He carries a strong experience in Fraud Investigations, developing anti-fraud frameworks, setting up Ethics and compliance programs. He is a keen writer on the subject of ethics, Compliance and white-collar crime and has published articles across various media.