Auditors are moving past simply auditing the anti-bribery program to take an active role in rooting out corruption.
In this podcast, Joseph McCafferty, former head of audit content at MISTI, talks with Thomas Fox, an attorney who specializes in the Foreign Corrupt Practices Act and who edits the FCPA Compliance and Ethics blog. According to Fox, the role of internal audit in anti-bribery and anti-corruption programs is changing from one of detecting bribery to also working to prevent such activity from happening. He says internal audit has unique skills that can work, along with compliance, to root out bribery and help keep companies from running afoul of the FCPA and other anti-bribery laws.
“As part of a company’s general financial audit there should be an anti-bribery and anti-corruption component, but the key is following the money. Is money being paid out that is inconsistent with how it is being recorded on the company’s books and records?” says Fox.
He also says internal audit’s foray into automated transaction monitoring can aid in the anti-bribery effort, especially when looking at travel and expense reporting. “Defrauding the company through expense reports is not only a time-honored tradition, but it can also be used to get a pot of money to pay bribes.”
According to Fox another area that auditors should focus on to detect and prevent bribery is with third parties, which are often used to pay bribes. One thing they should look for, he says, “Is there a distributor who has a discount rate that is significantly greater than others? We just had an enforcement action [by the Securities and Exchange Commission] around that specific issue.
To hear Fox on the role internal audit can play in anti-bribery and anti-corruption programs, press play to listen to the podcast.
Length: 10 min. 28 sec.
size: 11.5 MB