ACCA Applied Knowledge · Business and Technology · Regulation and financial crime
Sanjay, an accountant at Orion Co, discovers that a director has been paying 'facilitation' amounts to a foreign official to speed up customs clearance, and the payments are recorded as 'consulting fees'. Which is the most appropriate FIRST action for Sanjay, consistent with ACCA's ethical principles?
Sanjay should raise the issue through internal channels, such as the audit committee or whistleblowing procedure, record the facts and consider legal advice. The payments look like bribery disguised as consulting fees, so ignoring them breaches integrity. External reporting or resignation may follow later if internal escalation fails.
- AIgnore the matter because the payments are small and commonly made in that country
- BReport immediately to the external regulator, without raising it internally
- CRaise the matter through the company's internal channels, such as the audit committee or whistleblowing procedure, and keep a record, while considering legal adviceCorrect
- DResign immediately and say nothing to anyone
Explanation
The payments may be bribery and the mislabelling suggests false records, threatening integrity. The proper first step is to use internal reporting routes such as the audit committee or whistleblowing policy, document the facts and seek advice where needed. Ignoring it breaches integrity; going straight to the regulator or silently resigning skips the proper escalation steps, though external reporting may follow if internal action fails.
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