Corruption Investigations

Corruption in the private sector includes bribery, conflicts of interest, kickbacks, collusion and extortion.

In 2018, the United Nations Security Council, intimated $1 trillion USD was paid in bribes with an estimated $2.6 trillion USD was stolen annually through corruption.

Your company is not exempt from corruption. If you engage suppliers through any form of procurement process then you are at risk.

The ACFE 2020 Global Fraud Survey indicated corruption occurred in 43% of the cases examined with a median loss of $279,000.

Corruption is prevalent in the procurement process. 

There are two areas to consider – the first is collusion with the vendor. This includes:

  • Bid rigging
  • Suppression of bids
  • Cover bidding (competing companies submit bids too high but ensure the minimum quote is obtained)
  • Fixing of prices, and
  • Rotation of bids
  • The second area is supplier fraud. This includes:
  • False invoicing
  • Counterfeit products (including parts)
  • Substitution of products
  • Variation abuse
  • False declaration re products and services to be provided, and
  • Manipulation of the delivery of goods and services.
  • You MUST implement the following:
  • Assess all associated risks
  • Develop policies and procedures relating to procurement
  • Engage in due diligence and ensure there are set processes in place for procurement
  • Ensure personnel are trained in what to consider when checking for any signs of procurement fraud internally and externally, and
  • Monitor and test your processes regularly

ACFE survey indicated the average corruption scheme lasted 18 months with an average monthly loss of $15,500. The survey also considered frequency of corrupt activities as compared to the size of the firm. Corruption identified in 38% of companies under 100 employees. 

Corruption is prevalent in non-profit schemes. 41% of the 191 cases examined experiences corrupt activities. 

ACCA can help you – Mick Symons is an experienced investigator in corruption. He spent more than 15 years as the Officer-in-Charge of the Anti-Corruption Branch of the South Australia Police and as Executive Director of the Investigation Division of the New South Wales Independent Commission Against Corruption (ICAC).

Contact us for a free consultation if you have any concerns your company is losing money to corrupt activities of your employees or any suppliers.

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