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A model for preventing corruption

Dominic Peltier-Rivest (John Molson School of Business, Concordia University, Montreal, Canada)

Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 8 May 2018

3477

Abstract

Purpose

This paper aims to investigate the extent of corruption globally, explains its social and economic consequences and introduces a model, composed of corporate governance mechanisms, internal controls and red flag analyses, which organizations can apply to prevent corruption.

Design/methodology/approach

This study uses criminology theories to analyze corruption and its prevention.

Findings

The global cost of bribery alone is estimated at US$1tn annually, not including costs resulting from non-completion and deficient completion of development projects (World Bank Institute, 2004). This paper shows that an effective prevention model should include a positive work environment and ethical governance; the implementation of a compliance risk management program with fraud risk assessments; an accessible psychological assistance program for employees; regular employee anti-fraud training; the implementation of targeted internal controls such as proper segregation of organizational duties; the adoption of fair compensation levels and realistic individual performance goals; a user-friendly and anonymous reporting mechanism; and independent and regular analyses of abnormal patterns (red flags).

Research limitations/implications

This paper extends previous research by tying together disparate factors into a cohesive model for the prevention of corruption.

Practical implications

The prevention model developed in this paper assists in deterring corruption, improving internal controls, improving the likelihood of detection and reducing opportunities to perpetrate corruption. By reducing the risk of corruption, this model also helps organizations and governments reduce project costs (public spending) and improve project quality, thus promoting economic competitiveness.

Originality/value

A comprehensive prevention model is developed to help curtail corruption and its devastating effects.

Keywords

Acknowledgements

The author thanks the participants of the 2014 American Accounting Association (AAA) Forensic & Investigative Accounting (FIA) Conference, the 2014 European Accounting Association (EAA) Annual Conference and the 2014 Irish Accounting & Finance Association (IAFA) Annual Conference for their helpful comments.

Citation

Peltier-Rivest, D. (2018), "A model for preventing corruption", Journal of Financial Crime, Vol. 25 No. 2, pp. 545-561. https://doi.org/10.1108/JFC-11-2014-0048

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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