Red Flags:
Bribery and Corruption
Thanks friends for the tremendous response on the blogs
written by me. I will continue sharing thought leadership on various topics.
Today I would like to touch upon the aspect of a much prevalent
and discussed factor of bribery and corruption in business.
We at Risk Consulting/ Forensic/ AML/ Compliance always look
out for “Red Flags” or “Indicators” in lay man language to discover if a fraud
or misconduct has happened or about to happen.
Bribery and Corruption as per ACFE can be described as
“wrongful use of influence for the benefit of the actor/ other person contrary
to the duty or rights of others”.
This includes but not limited to bribery, kickback, illegal
gratuity, economic extortion and collusion etc.
The Foreign Corrupt Practices Act of 1977 (FCPA) Act covers bribery and corruption of companies
listed on the US stock exchange and is one of the primary acts against which
the fraud is dealt with and necessary future course/ action is taken in line
with the principles of the act. Facilitation payments no matter how small of
value to fasten the work process are also covered under the act.
The Red flags or Indicators to look out for are as follows:
- Something of significant value is requested as a personal favor to get a contract awarded
- Commission paid to carry out/ fasten day to day or normal work
- Foreign travel or meals of family members of a person who can influence some work
- Request for transfer of money to third parties/ own/ family accounts
- Gifts given to influential management persons or government officials
- Kickbacks are disguised as marketing and promotion or miscellaneous expenditure
- Certain expenses mentioned above are much higher in comparison to actual revenue generated
- Request for sexual favors in exchange of work done
- Lifestyle of a person is way beyond the means he has
- Fees given to agents in the process where intermediary actually not required
- Wiring money through offshore/ shell companies
Would
be sharing further inputs in future articles. For fraud risk awareness training
for corporate and write-up please contact me on the below:
Raunaq
Chawla
+971-562642495/
+91-9650668585
Happy
to help with a smile!
