Getting rid of fraud, ten years on
E DII TO RII A L
During the ACCA’s centennial celebrations a decade ago, marked in Cyprus together with the local accounting body, ICPAC, the then-chef executive Allen Blewitt admitted that “there is no perfect answer to stopping fraud.”
Referring to the accounting scandals of Enron, WorldCom and Parmalat, Blewitt had added that “with the best will in the world, with the best regulatory structures in the world, it is still possible that an individual can commit fraud.”
However, he concluded that “regulation and responsibility are twin halves of the same issue,” and that “responsibility is a cornerstone of the profession, whether we are talking about transparency or integrity. Appropriate corporate governance is part of best practice, appropriate financial reporting and audit.”
At the time, even the ACCA introduced a change to its code or practice whereby any member of staff could report cases of malpractice of lack of corporate governance directly to the chairman.
So, have we learned anything from the landmark decisions introduced ten years ago?
Judging from the growing number of cases of tax fraud and embezzlement that are popping up like mushrooms all over the place, as well as the avalanche of bribery reports only recently reaching Transparency International Cyprus, it would seem that fraud still goes on. Worse still, whereas professionals in Cyprus used to balk at levels of corruption in neighbouring countries, it turns out that we are not too far behind after all.
How can a sewerage contract be overvalued by at least 30 mln euros and no-one got a sniff of the stink going on? How can property zones get redrawn and nobody notices anything suspicious? How can public servants get away with covering up tax evasion? It is clear that fraud and corruption goes unpunished because of the lack of transparency and responsibility.
Had we had transparency all this time, such as the doomed “whistleblower” legislation, then a lot of the stink would have cleared up a long while ago and the newcomers in public service would be cautious not to err in their duties. And if we had even a speck of responsibility in our conscience, then more than half of our politicians and public servants would have resigned their posts a long time ago and gone home.
This is what the Attorney General, the Justice Minister, the Presidential Commissioner for Reform and the President himself should be dealing with, and not their petty differences with others that belittle them.
Without transparency, responsibility and proper corporate governance, no foreign investor in his right mind would consider pumping money into Cyprus, knowing full well that the present environment carries a high level of risk. Those who have invested are willing to take that risk, but this should not be the exception, but rather the rule.