Despite greater efforts to build ABC frameworks, it’s clear that there are gaping holes in them. The problem is particularly acute in the management of third parties who increasingly act as conduits for bribes, making it harder to track. Respondents to the survey admit it’s the biggest challenge in the field of ABC, but they are not doing enough to develop a culture of compliance both among their employees and their vendors and other business associates.”
The main findings of the survey include:
- There is a sharp increase in the proportion of respondents who say they are highly challenged by the issue of ABC, compared with a survey KPMG conducted almost five years earlier. The proportion of U.S. and UK respondents who say it is highly challenging has jumped by more than 50 percent.
- As companies continue to globalize, their management of third parties pose the greatest challenge in managing ABC programs, ranking first in terms of auditing third parties for compliance and third in conducting due diligence over them.
- Despite the difficulty of monitoring their business dealings with third parties, more than one third of the respondents (34 percent) do not formally identify high-risk third parties. More than half of those respondents (56 percent) with right-to-audit clauses over third parties have not exercised these rights.
- Nearly two thirds of companies (60 percent) indicated that M&A is part of their growth strategy, however global business comes up short when considering ABC risks; in fact nearly a third (31 percent) are unaware of the consequences of failing to identify these risks during the acquisition phase.
- Respondents complain they lack the resources to manage ABC risk, ranking fourth overall among the top challenges facing the survey’s respondents.
- A top-down risk assessment would help companies set priorities, but executives admit that an ABC risk assessment is one of their companies’ top challenges.
- Data analytics is an increasingly important and cost-effective tool to assess ABC controls. Yet only a quarter of respondents use data analysis to identify violations and of those that do so, less than half continuously monitor data to spot potential violations. A similar proportion of respondents (26 percent) couldn’t say either way.
Much has been said about ‘tone at the top’, yet we continually see failings at middle and lower management level, which leads one to conclude that there is not enough focus on ‘tone at the middle’. Companies can have a perfect ABC program and yet continue to fall short, if they do not improve the way they do business.