In September 2022, IFAC launched its Action Plan for Fighting Corruption and Economic Crime. It provides a framework for how we can enhance the accountancy profession’s role in combating corruption and economic crimes, thereby advancing the UN Sustainable Development Goals (SDGs). In recent years, the fight against corruption and economic crimes has expanded to incorporate the use of emerging technologies that afford more real time and online deterrence and monitoring. These emerging technologies have reduced human intervention, improved monitoring, and digitized processes and procedures such that automation has become the new and improved way of delivering services to the public.
As part of the front lines in the fight against corruption, professional accountants should be aware of the available technologies, their opportunities, and accompanying challenges. In Nigeria, mobile applications, crowdsourcing platforms, and transparency portals are leading the way.
In developing countries, mobile applications are now increasingly used to empower citizens in remote areas, making information more accessible and providing platforms for feedback and reporting. There is no reason why the success of this technology cannot be used in the fight against corruption. In Nigeria, the government is taking initiative to expand telephone and wireless communications to rural areas partly for this purpose. This trend towards rural telephony will expand and reinforce the cash-less policy, and curb corruption and money laundering at the local government level. Other examples of mobile applications and websites to detect and deter corruption include the India-based ‘I paid a bribe’ which is a unique initiative to harness the collective energy of citizens to tackle corruption by encouraging them to report the nature, location, pattern, type, frequency and value of corruption to the website". This application encouraged the World Bank to create its own version known as the Integrity App. The Integrity App gives citizens access to World Bank-financed projects and the opportunity to immediately report on concerns of fraud and corruption.
Unlike crowdfunding, crowdsourcing platforms are deployed for collecting information. Crowdsourcing platforms allow citizens to report corruption incidences and publicly share individual experiences via the internet or telephone. Crowdsourcing platforms can also raise public awareness, educating people about their rights and the illegality of corruption. An example of crowdsourcing platforms being utilized in Nigeria is the Trade Route Incident Mapping System (TRIMS).
These are online platforms usually run by governments or NGOs that publish information on government operations and ideally provide government information as open data, meaning that data are freely and easily accessible, machine-readable, and explicitly unrestricted in use. In 2018, the Institute of Chartered Accountants of Nigeria (ICAN) launched an ICAN Accountability Index, aimed at assessing public finance management and public governance practices of the public sector including the federal, state and local governments. Since its launch, the Index has also created awareness amongst citizens to keep public office holders accountable in the management of the country’s resources and has improved transparency and accountability in public governance.
There are several other technologies and tools that can also be applied in the fight against corruption, such as:
- Data mining: In public procurement, data mining is used for auditing to monitor when governments issue bids, identify red flags, and detect patterns of collusion and false information. It is similarly used to identify ‘corrupt intent’ in payments or transactions through data visualization. Anti-corruption software tools are often designed specifically for detecting and responding to fraud, including “intelligent mining” of data sets and administrative procedures.
- Big Data: There are new data management techniques to prevent fraud and abuse in the public sector. These have been employed in the fields of public health, trade and taxation where predictive analysis and visualizations that determine trends, patterns and relationships in massive volumes of data, are used to gain valuable insights.
- Forensic tools: Forensic tools for auditors such as Self-Monitoring, Analysis and Reporting Technology (SMART) are employed to combat corruption risk. These tools can handle data velocities that involve real-time analyses of transactions, predictive modelling and anomaly detection while risk-scoring algorithms seek to flag or stop potentially improper payments.
- Whistleblowing tools: Whistleblowing tools using information and communications technology (ICT) are like crowdsourcing platforms as they enable people to report wrongdoing by public officials. Their principal aim is to support criminal prosecutions, while sometimes also leading to voter mobilization against corrupt elites. A couple of well-known examples include GlobaLeaks, an open-source software that can be adopted to different settings and the BKMS® compliance system.
- Blockchain: Blockchain could be applied by governments for public transactions and documents, for example, for tracking budget spending, saving land records and company registries, or reshaping contracting and payment systems.
- Artificial Intelligence (AI): With its ability to learn data structures, AI can potentially uncover hidden relationships such as corruption and can be used for more precise prediction models.
- Digital public services and e-governance: These initiatives reduce direct contact points between citizens and public officials. They automate processes, thereby removing opportunities for public officials to misuse their discretionary powers. This involves the use of ICT, particularly the internet, web-enabled devices, and electronic data management systems, for the provision of public services to citizens.
With any innovation, there will be challenges and constraints that users need to be aware of. Professional accountants should consider the following as part of strengthening their tools and resources in the fight against corruption.
- Blockchain can still be a platform for illicit trade, money laundering, tax evasion, and other criminal activities as individuals do not have to disclose their identify when participating in a transaction and the transactions are made very quickly. Maintaining the privacy and security of sensitive information stored on blockchain may present potential risks.
- For artificial intelligence, the predictions and performance of algorithms are constrained by the decisions and values of those who design them, and their intended goals for use. The difficulty and sometimes technical impossibility of understanding how AI has reached a given decision limits the transparency, explicably and interpretability of these systems
- For Big Data, it might be difficult having the appropriate government-wide policies, institutional strategies and data governance approaches in place to ensure an effective data-driven public service and integration of data analytics into day-to-day activities. Generally, ensuring consistent, reliable, and up-to-date information on open data and transparency platforms, and their proper management for easy access by the public will require considerable work.
- There is a considerable IT skills gap among accountants globally but also particularly in Africa.
- IT infrastructure for deployment of these IT tools is lacking particularly in government organizations and if new systems are deployed, there can be challenges integrating the new system seamlessly. Furthermore, getting buy-in from government employees to shift their procedures and use the new system will take time and strong change management processes.
- Whistleblowing tools can only function if complemented by whistleblower protection legislation — this protection is often missing in many jurisdictions.
Professional accountancy organizations (PAOs) can and should endeavour to raise awareness and train their members on effective IT tools for integrating anti-corruption framework into their everyday work. Effective accountability mechanisms backed with political will and a culture of ethics and integrity are necessary to have the desired significant impact.
Without doubt, technology will continue to play crucial roles as drivers of anti-corruption initiatives. Thus, as champions of anti-corruption campaigns and as part of their public interest mandate, PAOs are encouraged to provide the much-needed leadership, advice, and advocacy to relevant stakeholders and identify actions that they can undertake within their jurisdictional context from IFAC’s Anti-Corruption Action Plan.