Forensics Journal - Stevenson University 2015 | Page 41

FORENSICS JOURNAL

Due diligence, with regard to mergers and acquisitions sets the tone
and sends the message to regulators that the expanded organization
is committed to detecting and deterring bribery and corruption.
When companies voluntarily disclose and remediate improper
conduct identified during the process of a merger or acquisition,
the SEC and DOJ appear to be more lenient. In fact, the DOJ and
SEC have only taken action against successor companies when the
illegal activity is blatant and sustained or when the successor company
fails to stop the violations or participates in the illegal activity

global corruption (World Bank). The WBI message emphasizes
that contrary to popular belief, an anti-corruption approach actually
makes good business sense when overall costs are calculated. High
profile cases result not only in revenue loss due to fines, penalties,
legal and consulting fees but also the business’s reputation, customer
loss and disruption of operations. Money diverted to pay fines and
penalties is lost income for research and development, innovations,
and investment. Risk assessment and cost benefit analysis are critical
to successful operation in the global marketplace.

Originally allegations of FCPA violations were received through a
company’s internal whistleblower hotline. That trend changed with
the enactment of the Sarbanes Oxley Act in 2002 and the DoddFrank Act in 2012. These laws created other means and mechanisms
for reporting suspicions of illegal activity and provided protections
from retaliation against whistleblowers. The Dodd-Frank Act also has
monetary incentives of 10% to 30% of the amounts recovered by the
government as a means to encourage whistleblowers to come forward
(U.S. Department of Justice A Resource Guide to FCPA). Companies
considering whether to disclose potential anti-corruption problems
to the SEC must now consider the possibility that a potential
whistleblower may report it first to the government thus creating
greater liability for the organization.

To combat global corruption the players must understand the
root causes of corruption. However, the business community
does not control all the causal factors, thus the incentive to work
with non-government organizations such as the OECD, United
Nations and World Bank to address these environmental issues
which fosters corruption.
Djordjija Petkoski, former Head of Business, Competiveness and
Development program at the World Bank Institute is a lecturer
and Senior Fellow at Lawrence Zicklin Center for Business Ethics
Research, Wharton School, University of Pennsylvania. He also
serves as an adviser and consultant to the World Bank, Organization
of American States, and other development organizations. He believes
the new oversight and compliance guidelines “can create a transparent
business and policy ecosystem that will benefit the citizens and the
private sector. Through responsive regulations, governments can
create an environment of fair competition. The main benefits that
companies can provide to society is offering quality goods and services
at affordable prices. This can only be achieved in a market place free
of corruption” (D. Petkoski).

ROLE OF NON-GOVERNMENT ORGANIZATIONS (NGO)
The Organization for Economic Cooperation and Development
(OECD) has been in the forefront of anti-bribery acts since the
development of the OECD Anti-Bribery Convention in 1997.
The “Good practice guidance on internal controls, ethics and
compliance” offers excellent guidelines for companies establishing
controls to specifically address the risk of bribery and corruption
(Office of Economic Cooperation and Development). The OECD
has been proactive in working with countries to improve or establish
quality anti-bribery legislation and enforcement i.e., influencing
Canada to add a books, records and internal control section to their
Bribery Act issuing a second report on Russia’s efforts to implement
the OECD Anti-Bribery Convention. This report highlighted
“Russia’s efforts to disallow the tax deduction for bribes and for
passing requirements that Russian companies must implement anticorruption policies within their organizations” (Office of Economic
Cooperation and Development). Organizations like the OECD
have a critical role in combating global bribery and corruption
because they raise public awareness and help bridge the divide
between the public and the private sectors.

Transparency International (TI) is a global civil society organization
in the forefront of the fight against corruption. In October 2013,
TI released the third edition of their Business Principles for
Countering Bribery (Transparency International Business Principles).
The Business Principles were developed through a steering committee
comprised of academia, business, trade unions and other nongovernment bodies.
The latest addition of the Business Principles focuses on providing
information to assist companies in developing and strengthening
their anti-bribery programs. One interesting new recommendation
suggests an independent voluntary review be conducted regarding
the design, implementation and effectiveness of a company’s antibribery program. Public disclosure is also recommended.
Shruti Shah, Senior Policy Director of Transparency International–
USA, has been very involved in the development of the Business
Principles for Countering Bribery and the Verification of AntiCorruption Compliance Programs which was released in July 2014.
Shruti stated that good progress over the last decade has occurred
in the development and implementation of US organizations’

The World Bank has also raised awareness and fought bribery
especially through the World Bank Institute (WBI). The WBI
released the “Business Case for Collective Action against Corruption”
in 2008 which lays the foundation for government, private industries
and non-government organizations to work together to combat

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