Business security

Digging Into Your Internal Controls

Corruption risks follow the money. If a company has effective controls over money, then the company has a good chance of mitigating corruption risks.

A key indicator of a company’s internal controls is to ask if the company has suffered any significant fraud in the last five years. If your company has experienced a high fraud rate, the company’s controls may be weak and corruption risks are likely higher than desired.

Bribery requires fraud in securing money. The difficulty is that internal financial controls are designed around the concept of materiality, and bribery often occurs with non-material misconduct. As a consequence, financial controls governing bribery risks have to dig down deeper into potential funding sources.