The FCPA Report

The definitive source of actionable intelligence covering the Foreign Corrupt Practices Act

Articles By Topic

By Topic: Forensic Accounting

  • 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. 3 No.9 (Apr. 30, 2014)

    Ernst & Young Experts Reveal How Forensic Data Analytics Can Transform Anti-Corruption Compliance

    The terms “big data” and “forensic data analytics” (FDA) can seem daunting, especially to lawyers, who may feel more at home opining on legal issues than creating the charts, graphs and maps produced by FDA.  But analyzing big data this way provides a wealth of information that can be used to detect and prevent corruption and can go far in demonstrating a command of compliance to regulators and prosecutors.  Ernst & Young (EY) recently examined how companies use FDA in their “Global Forensic Data Analytics Survey 2014” (Survey).  Vincent Walden and Brian Loughman of EY’s Fraud Investigation & Dispute Services practice spoke with The FCPA Report about the significance of the Survey findings and how companies can use these tools.  EY’s Richard Sibery, with other FCPA experts, gave further insight into big data and FDA at a recent panel at the New York City Bar Association, “Using Data Analytics and Information Technology to Build and Manage an Effective Anti-Corruption Program.”  See also “Anti-Corruption Audits, Risk Assessments, Transaction Testing and the Dangers of Petty Cash: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice,” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).

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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.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. 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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