The risk of Australian and New Zealand organisations encountering bribery or becoming corrupt is high, according to the latest study by Deloitte.
The group said many businesses remain ill-equipped to identify bribery and corruption cases, thus failing to manage and prevent them.
“The risk is actually higher than ever and, for many organisations, it will only be a matter of time before a corrupt offer or demand is made and someone gives in to temptation and takes advantage of a control gap,” Deloitte forensic partner Frank O’Toole said.
Deloitte surveyed more than 250 CFOs, chief risk officers, directors and employees responsible for risk management, including those from ASX 200 and NZX 50.
The key findings indicate that of those 40 per cent that have operations in high-risk jurisdictions, 35 per cent have experienced a known bribery and corruption incident in the past five years.
Twenty-three per cent of organisations have experienced one or more known instances of domestic corruption in the past five years, while 40 per cent of respondents with offshore operations said they do not have a formal compliance program to manage corruption risk.
“This raises the question: how can these organisations possibly determine whether or not they are at risk, and know whether a corruption event has occurred, is occurring, or is likely to occur?” Mr O’Toole said.
Twenty-three per cent of organisations surveyed with offshore operations are not concerned with risks arising from non-compliance with applicable legislation and 77 per cent of these have never undertaken a bribery and corruption risk assessment.
Despite this, along with 40 per cent of respondents stating they do not have or do not know whether they have a formal compliance program in place to manage corruption risk, Mr O’Toole said they should be more careful than ever.
“Irrespective of the extraterritorial reach of the laws of certain western countries, it’s almost certain that any form of bribery and corruption committed in a foreign jurisdiction will be a breach of the local laws of that jurisdiction,” he said.
“The risk of organisations, their executives and directors, as well as the individuals directly involved, being prosecuted within the country that the activity has occurred in is therefore very real,” said Mr O'Toole.