Part A
One of the major risk faced by companies in Oman is related to dormant accounts as these accounts get easily unnoticed because of lack of financial activity and communication. This fraud is done by insider which enhances the risks of non-detection.
Actions for investigation of short-term
Close monitoring of financial transaction: Firstly director suspected will be suspended for the time investigation is completed, and close monitoring of financial transactions will be done by independent auditors. This step will be taken as individual or individuals engaged in fraudulent activities will try to cover up and at that culprit involved can be detected.
Confirmation from external parties: By considering sales transactions external confirmation will be taken from the other parties involved to ensure the reliability of transaction. This transaction can be selected on the basis of stratified random sampling to cover all transaction categories.
Actions for investigation of long-term
Surprise audit: For long-term; surprise audit will be undertaken to assess financial transactions to prevent fraudulent activities. This audit will be conducted by the independent person so they will not be partial towards directors.
Use of accounting software: Transaction will be recorded on software and will be assessed by auditor team on a regular basis to detect fraud issues.
To
Risk Committee
XYZ company
Dear Committee
Your team is requested to consider following identified issues to resolve the same by the implementation of cited recommendations:
Issue identified
These professionals will provide various services start from complete internal control audits and forensic analysis to other required consultations.
Head of financial crime
Name _ _ _ _ _ _ _ _ _
Signature: _ _ _ _ _ _ _ _ _
Date: 4th December 2017.
Part A
Legal and regulatory obligation to counter- bribery and corruption4
There are different types of the legislation that have been created by the Omani government against bribery and corruption. All the government officials are subject to law Royal Decree No. 112 of 2011 which prohibits, accepting; giving any kind of bribe that is against the legislation (Alalawico.com, 2017). If anyone is found doing this, then strict actions are taken in which the person is not only terminated or suspended from the work but is also held responsible for serving in prison with heavy penalties (Hough, 2013). Government officials are also prohibited from using the public funds for the personal uses, and if found then strict actions are taken. Omani Penal Code Royal Decree 7/1974 has also been created to fight against the corruption covering unethical and corrupt practices in the public sector. Other than that the law also has some restrictions towards the embezzlements of the state or the public funds that are being entrusted to the government official. For the private sector employees and the companies also same rules apply and the defaulters are either sent to prison or levied with heavy penalties (Hansen, 2012).
Omani law directly criminalizes abuse of office, passive and also the active bribery. All the officials are subject financial disclosure laws, whenever required by the government auditors. Non-compliance with these laws can result in heavy fines (Export.gov, 2017). However, despite all these laws, there are various loopholes which are very important to be taken care of as it is hurting the economy of the country (Choi & Davis, 2014). It is very important for the government to take the strict actions to make the laws better and effective.
Effectiveness of the legal and regulatory responses to bribery and corruption, linked to the Financial Services Sector
The financial service sector in Oman is not only scattered but is not regulated as it is done in any other countries. Oman is ranked on the 59th number as a country in terms of the effectiveness of the anti-corruption laws (Karpoff, Lee & Martin, 2012). Various rules have been set for the different financial institutions so that they can be prevented from affecting the laws of the country. In respect of this, regular auditing is done, and proper information is provided to both private as well as to public sector companies so that they can be prevented from committing crimes. The effectiveness of these laws is slowly increasing in this country as the government is getting day by day. All the companies and individuals are very well aware of the consequences if they are caught so it can be said that the effectiveness is increased in the past few years (Wouters, Ryngaert & Cloots, 2013).
The financial sector in the country is regularly updated with new laws and restrictions which prevent the companies from finding out the loopholes in the existing ones. It has really helped the government to stabilize the sector a lot (Oman Law Blog, 2017). The responses of the companies in this sector are also very positive, and they are trying to follow all the rules effectively. However, there is still a lot of scope for improvement because there are lots of corruption among the officials which hinders the policies and laws of the government (Arafa, 2012). It is very important for the country to make strict laws and rules that can be followed by these financial institutions so that the economy of the country can be developed.
References
Alalawico.com. 2017. [Online] Available at: https://www.alalawico.com/pdf/presentations/Anti-Corruption%20&%20Anti-Bribery%20(27%20August%202015).pdf [Accessed 5 Dec. 2017].
Arafa, M. A. 2012. Corruption and Bribery in Islamic Law: Are Islamic Ideals Being Met in Practice?.
Choi, S. J., & Davis, K. E. 2014. Foreign Affairs and Enforcement of the Foreign Corrupt Practices Act. Journal of Empirical Legal Studies, 11(3), 409-445.
Export.gov. 2017. Oman – 9-Corruption | export.gov. [Online] Available at: https://www.export.gov/article?id=Oman-Corruption [Accessed 5 Dec. 2017].
Hansen, H. K. 2012. The power of performance indices in the global politics of anti-corruption. Journal of International Relations and Development, 15(4), 506-531.
Hough, D. 2013. Corruption, anti-corruption and governance. Springer.
Karpoff, J. M., Lee, D. S., & Martin, G. S. 2012. The impact of anti-bribery enforcement actions on targeted firms. Unpublished working paper. University of Washington.
Oman Law Blog. 2017. Anti-Bribery Laws: Restrictions on Providing or Receiving Gifts. [Online] Available at: https://omanlawblog.curtis.com/2013/10/anti-bribery-laws-restrictions-on.html [Accessed 5 Dec. 2017].
Wouters, J., Ryngaert, C., & Cloots, A. S. 2013. The international legal framework against corruption: Achievements and challenges. Melb. J. Int’l L., 14, 205.
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