Top 10 Data Analysis Tests for Detecting Bribery and Corruption


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 raise and this widespread phenomenon leaves organizations vulnerable to financial and reputational ruin.

Legislation exists around the world prohibiting bribery payments to foreign officials and political figures, such as the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, 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 unmonitored

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 analyzing 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 visualizations. Technology empowers senior leadership to quickly and consistently understand the potential impact of bribery and corruption risk across the organization.

When establishing an anti-bribery and anti-corruption (ABAC) program, a common mistake most organizations 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 organizations 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 Dollar Transactions

Identify employees with more than a defined number of even-dollar 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: Unauthorized Vendor Data Changes

Identify vendors with master data changes created and/or approved by an authorized 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.

(Source: ACL Blog)

Wednesday, October 1, 2014 In: Hot Topics Comments (None)

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