Top 10 Data Analysis Tests for Detecting Bribery and Corruption

A common mistake most organisations make is trying to ‘boil the ocean.’ An anti-bribery and anti-corruption program that is deployed in bite-size manageable pieces ensures longevity and success.

It has been a busy year for US Department of Justice (DOJ) and the UK Serious Fraud Office, with hundreds of millions in bribery and corruption fines already paid out. Bribery indictments are on the rise and this widespread phenomenon leaves organisations vulnerable to financial and reputational ruin.

Legislation exists around the world prohibiting bribery payments to foreign officials and political figures, such as the UK Bribery Act and US Foreign Corrupt Practices Act (FCPA), implemented to fight bribery and corruption. The failure to prevent and detect issues of bribery can lead to a serious offense resulting in heavy penalties, reputational damages, and possible incarceration. When language and cultural traditions vary so widely, a comprehensive approach including policy development, risk exposure assessment, control implementation, and ongoing transactional data monitoring is required.

Don’t let the risk go un-monitored

When it comes to managing and monitoring bribery malpractices, performing data analysis is the most powerful way to validate the completeness and accuracy of books and records.

An integrated risk assessment and data analytics workflow software solution allows you to evaluate and monitor strategic risks in real-time, while analysing business data with no manual effort required. It’s now possible to link data analytic test results directly to enterprise risks in the same system and display easily-interpreted visualisations. Technology empowers senior leadership to quickly and consistently understand the potential impact of bribery and corruption risk across the organisation.

When establishing an anti-bribery and anti-corruption (ABAC) program, a common mistake most organisations make is trying to ‘boil the ocean.’ An ABAC program that is deployed in bite-size manageable pieces ensures longevity and success.

Here are the top ten tests that organisations commonly deploy first.

ACL’s Top 10 Anti-Bribery & Anti-Corruption Tests:

Test 1: PEP/OFAC Sanctioned Providers Name Matching
Identify expense transactions where the vendor name (and attendee name in the case of meals) closely matches a name on the OFAC/GSA list or other supplied list of names (e.g., PEP list, prohibited vendors).

Test 2: Suspicious Key Word Matching
Identify payment transactions containing suspicious words in identified fields (e.g., description or comments fields) such as: gifts, services rendered, facilitation, cash.

Test 3: Transactions with High Risk Countries
Identify payment transactions to vendors or individuals in high risk countries.

Test 4: Repeat Even Currency Transactions
Identify employees with more than a defined number of even-currency cash expense transactions above a specific amount threshold in a specified time period.

Test 5: Flip-Flop Bank Accounts
Identify vendors with more than one change to bank account number within a specified time period.

Test 6: Unauthorised Vendor Data Changes
Identify vendors with master data changes created and/or approved by an authorised employee.

Test 7: Overpaid Purchase Orders
Identify purchase orders where the total payment amount was greater than the total purchase order amount.

Test 8: Invoice Receipt Greater than Goods Receipt
Identify Invoices where the invoice receipt amount is greater than the Goods Receipt amount.

Test 9: Flip-Flop Payee Names
Identification of vendors where alternate payee names have been flip-flopped within a specific time period.

Test 10: Split Payments
Identify cumulative Payments for two or more transactions approved by same Employee to the same Vendor that exceeds or is within a Percentage Below Threshold of the Authority Limit.

These tests are the most valuable analytic tests proven effective as an early warning system against bribery and corruption that ACL has distilled from more than 25 years of experience working with more than 14,000 organizations worldwide. Use these tests as a guideline on where to get started on building your bribery and corruption detection program.

Don’t wait until you’re hit with a violation. Show you’re taking the right steps, and put solid processes in place!

Friday, September 30, 2016 In: Newsletters, Whitepapers Comments (None)

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