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Australian companies that expand overseas face significant challenges in complying with anti-bribery and corruption regulations, according to KPMG.
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Overseas expansion exposes bribery and corruption: KPMG
10 September 2015
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A global survey conducted by KPMG has revealed that businesses find the management of third parties poses the greatest challenge to complying with corruption legislation.
Gary Gill, head of forensic at KPMG Australia, noted that auditing third parties for compliance and conducting due diligence over them stand head and shoulders above other issues identified in the survey.
“As Australian companies do increasing business overseas, they rely more heavily on third parties, often in areas where there is a high risk of corruption,” he said.
Mr Gill added that Australian companies must be increasingly vigilant since China, the country’s biggest trading partner, has made significant efforts to crack down on corruption.
“Asia is not immune from that [corruption]. It is third parties who are often conduits for bribes and they are difficult to detect, so management of third parties is a real challenge when it comes to ABC compliance,” Mr Gill said.
The survey also highlighted that while overseas expansion in the form of mergers and acquisitions is included in the growth strategies of almost two thirds of respondents, 45 per cent indicated they had failed to include corruption considerations as part of the pre-acquisition due diligence process.
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In addition, 49 per cent of respondents do not continuously monitor data to spot potential violations, with a further 25 per cent unsure of current strategies, the research found.
Gerben Schreurs, global leader of forensic technology services with KPMG, said the numbers are “shockingly low”, and argued that organisations need to ask the right questions in order to flag potential risks.
“People get lost in choosing from a wide array of tools, instead of focusing on what questions to ask and what data is needed to find the answer,” he said.
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