ACCA report reveals the hidden cost of bribery for SMEs

A new report from the Association of Chartered Accountants (ACCA) has revealed the pervasive impact of bribery and corruption on small and medium-sized enterprises (SMEs) worldwide.

The report’s research, titled Bribery and corruption: The hidden social evil on your doorstep, underscores the urgent need for increased transparency and robust regulatory frameworks to combat these issues.

It shows a high prevalence and deep concern about the damaging impact of bribery and corruption on SMEs, with more than half (59%) of SMEs and their advisers believing that standing up to bribery and corruption will cost them business trade or opportunities. The UK appeared more relaxed, with 46% thinking taking a stand would cost them.

Yet the survey also reveals a strong understanding of the benefits of standing up to bribery and corruption. 77% of global respondents, and 67% of UK respondents, agree that having a strong anti-bribery policy boosts customer confidence in their business. Furthermore, 68% globally and 68% in the UK say it increases their chances of getting lucrative contracts with big businesses and public sector bodies.

Jason Piper, ACCA’s head of tax and business law, said: “Corruption is a poison; it distorts markets, stunts economic growth, and deters investment.

“Many very small businesses don’t have the bargaining power to refuse when small bribes are demanded of them. 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.”

Drawing from a broad spectrum of global data, expert opinions, and real-world case studies, the report explores the multifaceted impacts of corrupt practices on SMEs and economic development. It highlights the severe consequences that businesses can face, including legal penalties and damage to their reputations.

The report 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.

Mr Piper added: “As global markets become increasingly interconnected, the imperative for accountability and ethical business practices becomes more pronounced.”

Susan Love, strategic engagement lead, Scotland, ACCA UK, said: “Scottish businesses are not immune to bribery and corruption, it is very much a global problem.

“We want to see Scottish businesses flourish, no matter how big or small, and it’s great to see having anti-bribery policies actually improving SME prospects.

“Our latest report will help educate readers about many forms of modern-day corruption, and how they can identify and prevent it.”

The accounting body hopes this report will serve as a catalyst for change, encouraging entities across all sectors to evaluate their practices and align with the best standards of business conduct. The report is recommended for business leaders, policymakers, and regulatory bodies worldwide committed to uprooting corruption and fostering a fairer business environment.

Article Credit: https://www.scottishfinancialnews.com/articles/acca-report-reveals-the-hidden-cost-of-bribery-for-smes