ACCA - Blog

Governance - Just a Word

Tuesday, May 07, 2013

When Governance means “nothing”

You want to invest in a company – the first thing to examine is the financial records of the company.  Just how solvent is the company?  What does the future hold?

But what if these records are false – it would appear a lot of them are.  A fraud survey published by Ernst and Young indicated the demand for growth has led to “cooked books”.

The survey indicated one in five of nearly 3,500 staff from 36 countries in Europe, the Middle East, Africa and India had seen “financial manipulation” in the past 12 months.

It gets worse with 42% of Board Directors and top managers indicating they knew of “some type of irregular financial reporting”.

More than 50% of the sales staff surveyed did not consider anti-corruption policies as “relevant”. More than 25% indicated it was alright to offer personal gifts or services to win accounts.

It would appear the concept of bribery of foreign officials is just smoke to be blown away if a deal can be made. It is acceptable to engage in corruption, cut costs, apply pressure on suppliers to take short cuts or just cook the books.  This is all OK - as long as the company records look good.

 I wonder what it is like in Australia?  Are we just as complacent, just as corrupt?  Maybe we need a similar survey here. See

Gate Keeper Corruption

Monday, May 06, 2013

Gate Keeper Corruption

The World Bank conducts regular surveys on the ease of doing business in various countries (see  The "ease" relates to the amount of gates that have to be opened before the business is established.,

The latest survey indicates South Africa ranks 39 out of 185 countries.  A person starting a business has to move through five gates, and if you want to get a construction permit then there are 13 gates, Each one of these gates has to be opened by a public official - each one provides an opportunity for corruption.

It makes you wonder when there is a move to introduce a Licensing of Business Bill.  The Bill, in its current form, provides greater opportunity for corruption (see

There is always a dilemma when trying to have a system to monitor licences – do you introduce more controls to ensure compliance and take the risk of increasing corruption?

How do you ensure the gates do not need oiling?

Sleep DOES Matter

Sunday, April 01, 2012

Lack of Sleep = Lack of Ethics

Recent research has confirmed that lack of sleep makes you do unethical things. Tiredness has been a factor in industrial accidents with heavy machinery but now it appears to be a contributing factor in fraud and corruption.

The research indicates lack of sleep leads to inflexible thinking, greater difficulty in coping with changes in circumstances and an inability to reason correctly leading to tunnel vision.

The inability to reflect on the consequences of our actions is the first capacity we lose when we get tired.

So the company that praises the worker who pulls an all-nighter to get the job done or functions on 4-6 hours sleep a night is setting itself up for a massive fall as there is a strong possibility that employee will cut corners and act in an unethical manner leaving the company open for criticism and possible litigation. In addition, there is always the possibility this person will resort to fraudulent activity to “claim the reward” he or she believes is theirs because of the extra time they are putting in – the lack of sleep increases this possibility.

Cybercrime – the next assault

Wednesday, March 28, 2012

Cybercrime is starting to impact on business.  This is not necessarily the use of computer technology to create fraudulent invoices and ghost bank accounts.  The dependence of a business on the technology is a massive risk especially with companies who do not have a structured back up plan and a business continuity plan.

It is simple for a disgruntled employee, customer or supplier to introduce a virus into the system to destroy critical business information. An even more insidious attack can be to introduce a virus that you distribute to customers and suppliers attacking their systems.  This destroys your customer or supplier base, leaves you open for civil litigation and destroys your standing in your business community.

Files can be downloaded and distributed on social media sites.  Your accounts can be accessed and bank details or access details stolen and either used, sold or just distributed across the internet.

It is important for you to realise the potential harm from cyber attacks. Take action to prevent an attack by introducing monitor programs and other checks to reduce the potential for these attacks.