NASACT Annual Conference Biloxi Mississippi November 2004

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NASACTAnnual ConferenceBiloxi
MississippiNovember 2004
Linking Global Corruption to Economic Terrorism

• J. Graham Joscelyne CA(SA) CIA
• UHY Advisors

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Whats the Connection?

• Corruption is Economic
• It hits our pockets
• It reduces our standards of living
• Corruption is Global it knows no borders
• Standards of accounting and auditing vary
• Regulatory reach differs country to country
• Corruption is Fearsome it knows no boundaries
• Individuals
• Communities
• Countries

It Terrorizes and Paralysizes
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Why worry its Foreign to Us?

• But, what about
• Global realities?
• As custodians of public funds, we need to
• Connect the dots
• Assess the risks
• The effect of Globalization on us?
• As business executives, we cant
• Escape the facts
• Avoid the impact
• The realities of Corruption?
• As risk managers, we must recognize
• No immunity
• Possible involvement

In fact, it becomes a local issue
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What are the Global Realities?

• Country Corruption there is no immunity
• World Bank position
• Transparency International Index
• Nothing stays static
• Each country has its peculiarities
• Public Sector Corruption transparency is not a
  given
• Civil service
• Judicial system
• Political system
• Private Sector Corruption not the victim only
• Interface with public service
• Interface with political system
• Often the perpetrator

Its pervasive
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Power and Ruthlessness

• Mindset of the perpetrators
• Creativity of the crooked
• Focus of those involved
• Determination to do it and benefit
• Culture of doing business

A dangerous combination
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Money and Desperation

• Inventiveness of the perpetrators
• Investment of time, energy and cash
• Impatience of the schemer
• Improbability of some schemes

A deadly cocktail!
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So, what can we do?

• Recognize our role in the public eye
• Representatives, leaders, guardians, risk
  managers
• Upholders of the law
• Understand the nature of corruption
• Where it comes from
• How it impacts us
• Where it can hurt
• Organize our responsibilities accordingly
• Transparency about the risk
• Vigilance in prevention
• Diligence in pursuit

This..and more
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Improve our Due Diligence

• Dont assume
• US standards apply globally
• Global audit practice is consistent
• Numbers are correct
• Do more oversight and monitoring
• Follow the business to its sources, globally
• Which countries are involved?
• What is the culture of corruption?
• Think how we might be victimized
• How much are we exposed?
• What would be the consequences, if discovered?

Its worth the effort
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And then act

• Show were serious
• Show were smart
• Show were determined
• Show were transparent

Show we are trustworthy
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A Change for Good

• Corruption that
• Affects us all
• Infects and infiltrates
• Impacts beyond dollar cost
• Countered by
• Knowledge of the scourge
• Understanding of how it works
• Wisdom of choosing ways to deal with it
• Cognizant of
• Victims both here and globally
• Our ability and duty to act

Reduces the impactLimits the damage
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Contact Information
J. Graham Joscelyne Director International
Services UHY Advisors 1425 K Street,
NW Washington, DC 20005 [phone] joscelyne_at_
ukw.com