The Anti-Corruption Report

The definitive source of actionable intelligence covering anti-corruption laws around the globe

Articles By Topic

By Topic: Forensic Accounting

  • From Vol. 7 No.21 (Oct. 17, 2018)

    Lessons From AB InBev’s Data Analytics Program: The Future is BRIGHT, and the Future Is Now

    Though the concept of data analytics often piques the interest of compliance officers, integrating a comprehensive system into a compliance program can be daunting. In this guest article, Matt Galvin, the vice president for ethics and compliance at beverage giant AB InBev, explains what the company learned from its experience developing and implementing BREWRight, a data analytics program that he argues has vastly improved the company’s compliance functions, and that has the potential for even more impressive results in the future. See “Using Data Analytics to Boost Compliance Program Effectiveness” (Jun. 27, 2018).

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  • From Vol. 5 No.9 (May 4, 2016)

    Using Data Analytics to Meet the Government’s Anti-Corruption Compliance Expectations

    The SEC and DOJ’s FCPA Resource Guide outlines ten “Hallmarks of an Effective Compliance Program” that provide prescriptive guidance about what the DOJ and the SEC consider to be critical components of an effective compliance program. But, what are compliance officers and chief audit executives to do in response to this regulatory “perfect world” of compliance? With limited resources and competing priorities in the real world, where should compliance officers and chief audit executives focus their efforts to meet this guidance? The answer is data analytics, Grant Thornton’s Bill Olsen, Dan Reynolds and Alex Koltsov say in a guest article. They argue that when used properly, data analytics is proactive, risk-based, scalable, repeatable and defensible against after-the-fact scrutiny. The article focuses on how two regulatory program “hallmarks,” ABAC risk assessment and continuous improvement and monitoring, can be addressed by data analytics. See also “Ernst & Young Experts Reveal How Forensic Data Analytics Can Transform Anti-Corruption Compliance” (Apr. 30, 2014).

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  • From Vol. 5 No.2 (Jan. 27, 2016)

    An Accountant’s View on How to Effectively Use Forensic Investigators During an Internal Investigation

    The costs of a large internal corruption investigation can, and often do, overshadow even significant fines levied by regulators. When faced with an internal investigation that requires outside forensic investigators, a company’s ability to create effective relationships with those consultants can significantly influence the final cost of the investigation. In an interview with The FCPA Report, Sara Putnam of PwC shares an accountant’s view of an FCPA investigation. Putnam describes the tools a company can provide investigators to make the investigation more effective, discusses how an investigation team can be designed, addresses data privacy issues and more. For a former prosecutor’s take on internal investigations, see “Former Prosecutor Nathaniel Edmonds Shares His Internal Anti-Corruption Investigation Strategies” (May 13, 2015).

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  • From Vol. 2 No.18 (Sep. 11, 2013)

    Fighting Corruption with Creative Data Mining: Five Forensic Accounting Techniques for Development Program Investigations

    The World Economic Forum estimates that the cost of corruption amounts to more than 5% of global GDP ($2.6 trillion), with more than $1 trillion paid in bribes each year.  Creative data mining is one of the most effective tools in identifying transactions connected to this illicit behavior.  It is commonplace in most every fraud and corruption investigation nowadays to pull raw data from ERP systems, identify relevant pools of data and design queries to find anomalies.  What happens, though, when an organization is faced with a situation where such raw data is unreliable, incomplete, or not available at all?  More often than not, the robust data sets that one would likely have access to in corporate investigations are not available in the case of development projects financed by institutions such as the United Nations and the World Bank.  Such projects are often plagued by inadequate accounting systems, archaic banking practices and a general lack of management and fiduciary controls.  In a guest article based on dozens of global corruption investigations, Jean-Michel Ferat, Managing Director at The Claro Group, describes the primary corruption risks inherent in development projects and – using slides taken directly from his investigative experience – details five workable methods for mitigating those risks.  See also “How Forensic Accountants Help Identify Corruption Risk and Delve into the Details of Books and Records,” The FCPA Report, Vol. 2, No. 12 (Jun. 12, 2013).

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  • From Vol. 2 No.13 (Jun. 26, 2013)

    Estimating Loss: When and How to Calculate and Disclose Financial Reserves for FCPA Settlements (Part One of Three)

    It is no secret that FCPA settlements can be monstrously expensive.  When faced with such a substantial loss, publicly traded companies often have an obligation to reserve funds in anticipation of a potential settlement and to disclose the amount of that reserve.  How should a company involved in settlement negotiations with the government go about setting such a reserve?  When during those negotiations should the company begin to consider reserving funds for a future settlement?  How should the reserve be calculated?  How should it be disclosed?  The FCPA Report is publishing a multi-part series addressing these and other crucial issues.  This article, the first in the series, discusses the accounting principles governing the setting of the reserve, examines when during an investigation a company should set a reserve and describes who should be involved in setting the reserve.  The second article in the series will discuss the issues a company should consider before setting a reserve and the risks related to setting reserves.  The third installment will discuss how to calculate a reserve and how to draft the disclosures announcing the reserve.  It will also include a compendium of actual FCPA reserve-related disclosures from recent SEC filings compiled with help from Intelligize’s database and search tools.

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  • From Vol. 2 No.12 (Jun. 12, 2013)

    How Forensic Accountants Help Identify Corruption Risk and Delve into the Details of Books and Records

    Forensic accountants are an integral part of anti-corruption compliance.  From proactive risk assessments to reactive investigations, forensic accountants can probe the details of a company’s books and records, assisting compliance officers and in-house and outside counsel.  This guest article by Lindi Jarvis and Javier Alvarez of FTI Consulting provides insight on the steps forensic accountants can take to prevent, detect and remediate corruption, highlighting best practices and including examples such as a “heat map” to help focus resources in high-risk areas.  See also “SEC’s FCPA Unit Chief and Top Practitioners Address the Role of Financial Controls in FCPA Compliance Policies, Internal Investigations, Self-Reporting and Related Topics,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 2 No.9 (May 1, 2013)

    Handling the Challenges of Overseas Anti-Corruption Investigations: Forensic Accountants, Government Expectations, Translators, Upjohn Warnings, Privilege Issues and Recording Interviews

    Internal FCPA investigations do not respect jurisdictional boundaries, and varying customs and laws of different areas critically impact not only internal investigations, but also prosecutions and litigations for multi-national companies that may follow.  Failing to identify and address the specific issues relevant to an anti-corruption investigation can have significant legal and financial consequences.  A recent panel of experts at the American Bar Association’s Institute on Internal Investigations and Forum for In-House Counsel discussed the complexities of internal investigations, sharing their advice on best practices starting with actions to take during the first 72 hours of the investigation.  From both government and private sector perspectives, the panel addressed how to handle language and cultural differences, as well as how to navigate varying legal regimes that affect privilege and complicate the collection of documents.  They also provided insight on interviewing witnesses and how best to deal with the U.S. government when it comes to disclosing an investigation.

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Integral Elements of Proactive and Pre-Merger Anti-Corruption Forensic Audits

    The last five years of FCPA enforcement have increased the need for comprehensive and effective compliance programs and controls designed to detect, deter and remediate instances of bribery and corruption.  A hidden jewel for some organizations is the use of the forensic audit function to help achieve these objectives.  A properly staffed and well-trained forensic audit team can provide a positive return on investment if used appropriately to satisfy the new imperative of a well-functioning compliance program.  Conducted competently, forensic audits can go a long way toward preventing violations, detecting violations (including in the merger and acquisition process), aiding the investigative and remedial process, substantiating the existence, amounts and recipients of payments and ultimately helping a company earn credit when negotiating with the government or self-reporting discovered violations.  See “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).  In a guest article, Paul E. Zikmund, Global Director, Ethics and Compliance, at Bunge Limited, discusses the core elements of proactive FCPA audits, as well as the key mechanics of pre-merger anti-corruption forensic audits.

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  • From Vol. 1 No.4 (Jul. 25, 2012)

    An Interview with Judge Stanley Sporkin, the “Father of the FCPA” (Part Two of Two)

    This article includes the second part of The FCPA Report’s extensive interview with the esteemed Judge Stanley Sporkin, who is widely credited with developing the books and records provision of the FCPA when he was Director of the Division of Enforcement of the SEC in the 1970s.  Judge Sporkin was also a federal judge in the District of Columbia and General Counsel of the CIA, and is currently the Ombudsman for BP America.  The second part of our interview includes Judge Sporkin’s comments on: self-reporting; the new FCPA Unit at the SEC; his proposal for amnesty; the biggest mistake companies make when it comes to corruption; the movement to amend the FCPA; the potential importance of ombudsmen; and combining anti-corruption audits with annual audits.  In the first part of the interview, Judge Sporkin offered insight into, among other things: the origins of the FCPA following the Watergate hearings; his contemporaneous view on the difficulty of substantiating anti-bribery claims; the origins of internal investigations; and the pro-business orientation of the FCPA.  See An Interview with Judge Stanley Sporkin, the ‘Father of the FCPA’ (Part One of Two),” The FCPA Report, Vol. 1, No. 3 (Jul. 11, 2012).

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