Introduction
With the advent of technology, there has been an increase in the level of financial crime. Malicious people tend to incorporate the available technical skills to reap from illegal nonviolent financial gains, often through deception. This report aims at understanding the various Financial Crime Prevention (FCP) practices in the industry. It develops an appropriate framework whose incorporation will ensure the detection and prevention of bribery and corruption. The suggested framework remains flexible, scalable with a high potential for integration. According to the World Economic Forum, organizations are losing significantly and investing heavily in fraud and financial crime, considering that an estimated $8.2 billion was spent on anti-laundering controls alone in 2017 (Hasham, Joshi & Mikkelsen, 2019). There is a need to incorporate the stated measures to ensure early detection and prevention of bribery and corruption to save the cost.
Financial Crime is an illegal activity referring to deceptive approaches such as corruption and bribery as a breach of trust for selfish gains. According to Adams et al. (2006), fraud can only be dealt with through detection before occurrence. A business cannot exist without exposure to bribes and corruption, which is a significant challenge in the public and private sectors. According to Pickett and Pickett (2002), organizations need to enact appropriate policies to monitor and detect illegal activity. Therefore, in the banking sector, it remains the management's responsibility to prevent bribery and corruption in safeguarding the organization's assets while financing others to help transform the economy.
The organization lacks internal controls on the procurement processes considering that no oversight, approval and cooperation records exist. Specifically, the procurement committee needs to be revived and empowered, considering policies to safeguard it from mean activities. Under the procurement department, it will be necessary to have proper budgets and adherence to the same. As a statement of income and expected expenditure, the budget minimizes the risk of exposure to bribery practices since the responsible managers are bound to operate within the specified structure. According to Okoye et al. (2020), the existence of a budget ensures forensic accounting, which is an innovative aspect geared towards the detection and prevention of financial misdeeds. Suleiman, Yahaya, and Abba (2018) further the dissertation by stating that a budget's inexistence remains attributable to inefficient investigation and prosecution of corrupt practices. Therefore, adopting a budget as a tool will ensure the organization operates within a given set of rules whose oversight and approval can be traced under the forensic accounting system.
The preparation of internal controls to promote staff integrity and strict disciplinary measures for any breach remains critical if the business reduces the probability of corruption or bribery. Therefore, the team needs to be regularly audited under the existing legal procedure frameworks with necessary. Robust control is not only essential to business as a requirement but a crucial factor for regulators when fraud happens (Biegelman & Bartow, 2012). The organization needs to incorporate routine checks and balances on the staff to ensure they operate within the financial integrity policy. The controls can be extended to lifestyle audits to ensure staff lives within their means. Hence, they are not tempted to indulge in corrupt practices to satisfy their greed. Such controls will also ensure a compliance culture since all the prerequisites to fight corruption and bribe exist.
Gifts and Hospitality Register
The internal controls earlier suggested the need to ensure that the gifts and hospitality register remains filled and available for review to all staff members. Availing the records and frequently communicating about the records to the staff will ensure transparency. According to UniCredit Group, the provision of disproportionate gifts or business hospitality may result in risky practices that are likely to be considered bribe and corruption (Policy, 2018). Such acts tend to weaken the judgment likely to be received from the receiving party, creating a compromising situation that affects the business's general nature.
As a policy, the employees should be prohibited from asking for any form of gifts from the prospective customers or third party to the organization as a means to avoid unnecessary conflict that might arise (BANK, 2017). Gifts often threaten the recipient party's independence as the giver expects to be treated favorably. In this case, therefore, the token can be avoided or transparency provided with a written agreement between the giver and recipient party discretely providing that they shall not be bound to act in any capacity after receiving the gift. In this case, the company will not lose the advantage of a gift offered in a good act of faith to the business, maybe to reward or encourage the team.
Conclusion
In conclusion, adopting appropriate controls to the business environment in the technological age remains a significant priority. In the recent, after the engagement of independent auditing to the company, it was evident that these controls lacked especially on the oversight, approval, and cooperation from the board regarding the FCP requirements, which stands as a significant threat to business. The strategies highlighted, including the gift and hospitality book policy, need to be considered to avoid any emergent issue from a themed visit by the regulator.
