What is the resilience of an entity in preventing, deterring, and detecting fraud and corruption?
Tempe, March 29, 2017 Technical Staff
Proper Anti-Corruption Competencies of Senior Civil Servants, Elected Public Officials, and Employees
The prevalence of adequate anti-corruption education in government entities always determines to a large degree the effectiveness of internal control and corruption prevention policy in detecting fraud and corruption. Each governmental and / or management level requires a different set of anti-corruption competencies. For example, the internal department head anti-corruption skills differ from those of the deputy minister of a government entity. Each employee should possess the necessary anti-corruption knowledge and skills to meet what management expects her to do in detecting fraud and corruption. Surprisingly, central banks all over the world require their local banks to ensure that their employees obtain annual anti-money laundering training. Though money laundering is a very tiny and small part of corruption, central banks do not require their local banks to (a) have a corruption prevention policy, and (b) ensure that their employees obtain anti-corruption training annually. There are too many banks that do not have a corruption prevention policy, especially in developing countries. This is extremely odd as financial institutions are regarded more regulated and disciplined than other business sectors. This is a red flag that regulatory agencies should note due to its severe consequences on not only detecting fraud and corruption but also on financing terrorism. The AACI believes that the adequacy of anti-corruption competencies of senior public officials and those charged with governance should be quantitatively measured annually. Last year, we launched a certification program called Organizations Anti-Corruption Certification Program to support organizations of all types to quantify their anti-corruption competencies, among other things.
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What is the resilience of an entity in preventing, deterring, and detecting fraud and corruption?
Tempe, March 29, 2017
Technical Staff
Increase the Likelihood of Detecting Corrupt Acts A government entity would enhance its deterrence of corruption when it increases the likelihood of detecting corrupt or fraudulent acts. The perpetrator would usually weigh the benefits and costs of his fraudulent act. Under normal psychological and emotional conditions, he will rationally decide whether to commit fraud or corruption. The more the perpetrator believes that his fraudulent act would be uncovered, the less likely he will commit fraud or corruption. For example, when a cashier knows that the internal audit department personnel are competent and usually carry out surprise physical cash count of money in his custody, he will not take a high risk of being caught “borrowing” cash from his custody.
Systems of internal control that are well designed and implemented effectively would support the organization’s deterrence of corruption. Although internal control systems have their inherent limitations, a whistle-blowing policy would create a significant deterrence impact on the perpetrator’s perception of the likelihood of being detected. Prevailing honesty and integrity within the government entity’s culture also support its deterrence of corruption. However, the efficacy of deterrence of corruption depends on the following two fundamental deterrence principles: (a)Severity of punishment, and (b)Certainty of punishment Severity of punishment Punishment is severe when it deters a perpetrator from committing a fraudulent or corrupt act. However, one cannot conclude that whenever there is corruption, its associated punishment is not severe. A severity of punishment would be measured by the degree to which a perpetrator understands the risks (costs) of corruption and the extent to which it deters him from committing fraud. Log into your account to continue reading If you are not a member,join us today. We will start rolling over the CACM via exam in selected countries and regions. CACM candidates of these countries will find the CACM Review material helpful.
The AACI delivers globally a disciplined anti-corruption certification program to organizations seeking to prevent fraud and corruption inside their business processes, operations, and culture.
This certification process is the first of its kind worldwide and forms a basis for institutional change in fighting fraud and corruption. It is available to organizations of all types. The process is “principally” administered and completed online.
As we received too many questions about this new certification program, the technical staff of The AACI addressed the substance of these matters in the following question and answer blog.
Q: What is the Corruption Prevention Management Test (CPMT)?
The AACI: The CPMT is an online test authored by and copyrighted to The AACI. It is the core of the organizations' anti-corruption certification program. Except for the CACM members of The AACI, the CPMT is not available to individuals; it is only available to organizations ( private, public, or nonprofit) seeking to get certified through the organization anti-corruption certification program. As the exam unit of The AACI administers it, we use third party software to deliver the CPMT (software provider).
Q: What are the benefits of getting an organization certified?
The AACI: The certification process enables those charged with governance of the organization to:
1.Evaluate and measure relevant corruption prevention knowledge competencies of the board members, senior management and employees.
2.Identify the strengths and weaknesses of the entity's corruption prevention knowledge that is necessary for preventing fraud and corruption.
3.Select appropriate responses to address identified corruption prevention knowledge weaknesses.
4.Set apart the organization as taking the risks of fraud and corruption seriously from those that do not.
5.Support the board members, executive management, and other decision makers to meet their fiduciary and legal duties.
6.Support organizations to show their sincere duty of care efforts to protect the interests of all stakeholders.
7.Help those charged with governance to set a proper tone at the top.
8.Support an effective implementation of and compliance with corporate governance code or principles.
9.Support an effective implementation of comprehensive anti-corruption policy, internal control and processes, and code of ethics (conduct).
10.Support the organizations to comply effectively with the requirements of ISO 37001: anti-bribery management systems.
Q: Are there any other benefits for stakeholders?
The AACI: Yes there are. For example, the certification
1.Supports regulators or chambers mitigate and control bribery, fraud, and corruption in a business sector or segment.
2.Enables local governments or states to bring about real and visible anti-corruption efforts to be part of their local healthy business practices.
3.Supports the investment optimization in human capital.
Q: Is there a passing score for the organization under this certification program?
The AACI: No. There is not a pass or fail score. We report on the results of the certification process and issues a CPMT certificate reflecting the score of the organization as a whole.
Q: What are the primary topics the anti-corruption certification program of organizations tests?
The AACI: Most of the online test questions primarily deal with the following fields:
More than 80% of the questions cover the following:
1.Anti-fraud and corruption
2.Corporate governance
3.Internal control
4.ISO 37001: anti-bribery management systems
However, The rest of it touches on the following:
1.Accounting
2.Auditing
3.Management and ethics
Q: The certification process requires the organization to submit management representation letter stating in it the decision makers of the organization it has so that they sit to the CPMT. What do you mean by decision makers?
The AACI: For the purpose of this certification process, decision makers of an organization are the following:
1.Board members / partners / owner - manager
2.Chief executive officer (CEO)
3.Deputies of the CEO
4.Department heads
5.Deputies of department heads
Q: What would an organization obtain as a result of getting certified?
The AACI: The organization will get the following:
Q: How would this certification program assure an organization of preventing fraud and corruption inside it?
The AACI: The certification program, on its own, will not provide any assurance of preventing fraud and corruption inside any organization. It all depends on those who are charged with governance to bring this confidence. Those who are charged with governance in any organization are responsible for institutionalizing corruption prevention and deterrence inside their organization.
This certification program is an effective tool decision makers can use it to fight corruption inside their organization and in the organization's business dealings with all stakeholders.
Q: How can an organization measure the impact of the certification program?
The AACI: The answer consists of two parts: the first part is the visible one. An organization can compare its aggregate CPMT scores and CPMT reports over years and find out the results of its responses to earlier results.
For example, assume that in year 1, an organization had an aggregate CPMT score of 60% while two board members did not sit for the CPMT test- they had qualified CPMT report. After one year, this organization got certified and obtained aggregate CPMT score of 40% and unqualified CPMT report. Under these circumstances, those who are charged with governance of this organization have a duty to all stakeholders to answer for these results.
The other part of the answer to this questions is straightforward: corruption in any organization is unknown until it is discovered. As we do not know what the corruption level was at an organization, we cannot provide any precise and conclusive evidence about the exact level of corruption level reduction this certificate program affected.
What we are confident of is that when there is a proper tone at the top, and the top management has "real" will to fight fraud and corruption, this certification program is an effective tool to materialize their efforts.
Q: Why is the certification program an annual one?
The AACI: It is an annual certification program to
1.Maintain its credibility and public confidence in it.
2.Reflect changes in decision makers composition and / or their competencies over one year period.
Q: How would an organization benefit from the certification process in dealing with its suppliers?
The AACI: When an organization gets certified, it can ask its suppliers to get certified to continue business dealings with them. Integrity and culture of vendors affect corruption risks of any organization directly.
Q: How would a government utilize the certification program to fight fraud and corruption?
The AACI: A government and its agencies are well positioned to utilize this certification program to combat fraud and corruption effectively and efficiently. Presuming a government has a national strategic corruption prevention strategy, we believe a government can:
1.Set the example and have all its ministries and agencies certified.
2.Respond adequately to the results of the certification and start implementing national changes to improve its ministries and agencies score.
3.Set the certification program as a prerequisite for private sector organizations that want to transact with the government.
4.Start gradually requesting private sector entities to get certified.
5.Issue adequate rules, laws, and regulations to institutionalize corruption prevention.
Q: Will The AACI consider nationalizing the certification program to suit the local language, culture, laws, and regulations?
The AACI: In principle, yes we will. The AACI will also consider partnering with local governments or states to have a national CPMT certification program.
Q: How much does it cost to have an organization certified?
The AACI: The annual cost of certification depends on the number of decision makers who will sit for the test. There is also a fixed administration fee. For more information, you may contact us at Exam@THEAACI.com.
The AACI offers governments planning for nationalizing this certification program significant discount.
The Certified Anti-Corruption Manager (CAMC) is the premier
anti-corruption management credential targeting executive management and those
charged with governance. CACMs do make a difference.
Starting September 1,
2016, The AACI offers globally a disciplined anti-corruption certification
program to organizations seeking to prevent fraud and corruption inside their
business processes, operations, and culture. This certification process is the first
of its kind worldwide and forms a basis for institutional change in fighting
fraud and corruption. It is available to organizations of all kinds and types.
The process is principally administered and completed Online.
It is
an annual certification process that shows quantitatively the
collective anti-corruption knowledge score of those who are charged with
governance and reports on the result.
On
May 4, 2016, The AACI and Aqaba University of Technology (AUT) signed an
agreement to develop innovative anti-corruption three credit hours course to be
offered as a required course at AUT
and Arab universities: more than 330 universities. While The AACI will be
responsible for the design, content development, technical administration, content
update and maintenance, among other things, AUT will administer the course and
market it in the Middle East and Africa.
The
course design and content are innovative, engaging, interactive, and culturally
oriented. It is an unprecedented anti-corruption academic course offering in
the Middle East and Africa.
Mike
J. Masoud, the technical and advisory director in the Middle East and Africa represented The AACI while Professor Gaith Abandah, the president of the AUT
signed the MOU.
The
AACI works with many universities worldwide as a part of fulfilling its
mission.
This
is one of our engagements with academia. Read more.
