A high prevalence and deep concerns about the damaging impact of bribery and corruption on small- and medium-sized enterprises (SMEs) in the Asia-Pacific has been revealed in a recent study by the Association of Chartered Accountants (ACCA).
The report, Bribery and corruption: The hidden social evil on your doorstep, explores the true extent of how bribery and corruption impacts SMEs across the world, highlighting the pressing need for enhanced transparency and robust regulatory frameworks.
As financial leaders, it is necessary to understand the scope of these concerns and identify its relevance on their organisations. As the old adage says, prevention is better than cure.
For Asia Pacific, the research reveals that while 63% of SMEs and their advisers believe that standing up to bribery and corruption will cost them business trade or opportunities, there are benefits along the way.
The survey shows a strong understanding of the benefits of standing up to bribery and corruption among respondents, and 68% of them agree that having a strong anti-bribery policy boosts customer confidence in their business.
Meanwhile, 83% say it increases their chances of getting lucrative contracts with big businesses and public sector bodies.
"Corruption is a poison; it distorts markets, stunts economic growth, and deters investment," says Jason Piper, head of tax and business law at ACCA. "Many very small businesses don’t have the bargaining power to refuse when small bribes are demanded of them."
Piper adds that entrepreneurs have to choose between paying the bribe or losing the business – and often that is no choice at all for someone trying to support a family.
"Our report aims to arm businesses and regulators with the necessary insights and tools to root out corruption and foster an environment of transparency and trust. This could include the use of the latest digital tools. Just as technology is being used by criminals, so regulators and enforcement agencies should embrace it in the battle to detect, prevent and respond to them," Piper says.
The ACCA report highlights the severe consequences that businesses can face, including legal penalties and severe damage to their reputations. At the same time, the study also considers the effectiveness of current anti-corruption laws and policies across different countries, suggesting that while some progress has been made, much remains to be done to align international efforts.
"As global markets become increasingly interconnected, the imperative for accountability and ethical business practices becomes more pronounced," Piper says.
