Ethical business environment essential for SMEs; 64% see bribery and corruption as having a negative impact on the business environmentKUALA LUMPUR, Dec 3 (Bernama) --
In conjunction with International Anti-Corruption Day on 9 December, ACCA (the Association of Chartered Certified Accountants) draws much-needed attention to the impact of bribery which has become a global concern for many developing nations all over the world.
The timely release of this report on ‘Combating bribery in the SME sector
’ which is compiled from various countries and regions forms part of ACCA’s global strategy to raise awareness and advocate for rightful and ethical practices in business. The report covers a multitude of challenges faced by small- and medium-sized enterprises (SMEs) within a corrupted business landscape.
The World Bank estimates that businesses and individuals worldwide pay over $3.6 trillion in bribes every year. In 2017, the Transparency International Survey conducted on 160,000 respondents reveals that 1 in 4 participants had paid bribes for public services over the last 12 months.
Today, SMEs account for 99% of registered businesses around the world and although the impact of bribery and corruption in this sector can be significant, it continues to receive relatively little attention globally.
“Awareness on corruption and anti-bribery efforts can help inform parties such as investors, stakeholders and consumers of their shared responsibility to uphold ethical behaviour in the management of their business practices,” explained Edward Ling, Country Head of ACCA Malaysia. “In our professional capacity, reports like these serve to educate the public and future generations of accountants on the importance of fulfilling our responsibilities with due diligence and integrity.”Impact of Bribery on Industry & Economy
The survey-based report found that 64% see bribery and corruption as having a negative effect on the business environment. As many SMEs already struggle with cash flow, bribery is an additional financial and ethical burden that impedes its operations, growth and survival.
In addition, the potential harm that arises from bribery and corruption in the SME sector has a noticeable impact in other areas as well, which includes, but are not limited to:
- Erosion of trust when funds are misused
- Compromised safety when bribes are paid to overlook poor quality, flaws and weaknesses in products, services and infrastructure
- Poor financial performance or insolvency as funds intended for product development, marketing, training, infrastructure, maintenance and investments are diverted
- Stunted business growth, from SMEs being unable to obtain necessary licenses and permits needed to conduct its business, and disruption of fair market practices
- Weakened economy from lack of foreign investments, due to concerns of bribery and corruption in the business chainFighting Bribery & Corruption at all Levels
With 25% of survey participants thinking that SMEs lack proper understanding of the legal definition of bribery and corruption, greater awareness is the first step. Furthermore, 59% of respondents felt there is insufficient guidance being provided in this area, indicating a greater need for national and global frameworks.
On a positive note, the report indicated a high level of acceptance for anti-bribery and corruption programmes as over 70% of respondents think that an SME with strong anti-bribery values will boost consumer confidence, enhance a firm’s reputation for having high standards of conduct and help prevent firms from breaking the relevant laws. A majority also agreed that guidance from professional and trade associations would yield results, alongside an ethical code or agreement that businesses can publicly acknowledge and agree to.
The report concluded that the combined approach of a clearly-developed, SME-level statement of policy; the development of whistle-blowing laws; and legislature that carries severe penalties for non-compliance, is needed to effectively combat bribery. Furthermore, any anti-bribery guidance for SMEs must of necessity be short, accessible and sustainable, as many SMEs have limited resources for implementing such programmes.
The efforts would support international frameworks such as the UN Convention against Corruption
and OECD’s Convention on Combating the Bribery of Public Officials in International Business Transactions
, and mirror the success of national legislation such as the US Foreign Corrupt Practices Act (FCPA)
and UK Bribery Act 2010
For more details, view the full report at http://bit.ly/ACCACombatBriberyReport
.Towards an Ethical Nation
ACCA is a dedicated advocate for ethics, globally and in Malaysia. As bribery and corruption transcends borders and permeates different levels of society, public programmes play a role in fighting the erosion of ethical values and behaviour. In line with its global theme, ‘The Power of Ethics’, the ACCA ‘YES Malaysia’ campaign
calls on Malaysians to state their firm intent and support for a nation based on ethical principles by voting online at www.yesmalaysia.mySOURCE: ACCA MALAYSIA
FOR MORE INFORMATION, PLEASE CONTACT:
Name: Adeline Fong
Senior Manager, Public Relations
Tel: +603 2289 0117 / ++60 12 381 5589