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ACCA Strategic Professional · Advanced Financial Management · Corporate environmental, social, governance (ESG) and ethical issues

A multinational's subsidiary operates in a country where bribing officials to speed up customs clearance is common and not effectively prosecuted. The group finance director is asked to approve facilitation payments recorded as 'consulting fees'. What is the most appropriate response by the senior financial adviser?

The adviser should refuse approval, apply the group's anti-bribery policy consistently across all locations, and escalate to the board or audit committee if pressure persists. Local custom and small size do not justify bribes, and describing them as consulting fees would be misleading and unethical.

  1. AApprove the payments because local practice determines what is acceptable
  2. BApprove them only if the amounts are small relative to the group's revenue
  3. CRefuse approval, apply group anti-bribery policy consistently, and escalate through the governance structure if pressure continuesCorrect
  4. DApprove them but ensure they are disclosed in the notes as consulting fees

Explanation

Group policy and home-country anti-bribery laws (and professional ethical codes) apply regardless of local tolerance, and materiality does not make a bribe acceptable. Mislabelling payments as consulting fees compounds the problem by misrepresenting the transaction. The adviser should refuse and escalate to the audit committee or board.

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