A few weeks ago Ernst & Young unveiled a study entitled “Corruption or compliance: the 10th global fraud survey” in which Ernst & Young’s Fraud Investigation & Dispute Practice Service assess the level of understanding of anti-corruption practices and how these are abided by (or bypassed) in business.
Says David L. Stulb, global leader of the Fraud Investigation & Dispute Services:
“Executives in some companies today may still believe that paying bribes is good business; it “works”. But the risk of such action has certainly increased markedly in recent years.”
The report also concludes that corruptive behavior intensifies in times of turmoil – which anyone working with purchasing cannot have missed. Turmoil leads to confusion which leads to lack of transparency, which is further amplified by the effects of the downturn economy on staffing redundancies which in other cases could have been able to offload the workload to ensure full visibility into the processes.
So what measures can purchasing take to battle these unwanted behaviors?
A clearly defined and communicated purchasing policy is certainly a good start, usage of sourcing tools that ensures transparency and full visibility is also vital as are comprehensive purchasing processes.
On a more transactive level; a no PO/no pay policy in combination with widespread e-procurement adoption is a key lever that can secure that smaller corruption and fraud offenses such as fake invoices never see the light of day.
