A PRACTITIONER’S GUIDE TO CORRUPTION AUDITING

This Guide aims at enhancing awareness about corruption, its indicators and risks and possible recommendations that the auditors can make in their reports. It takes the auditors along, step-by-step, from audit planning to audit reporting. It intends to alert the auditors about avenues through which corruption seeps in the public institutions.

Corruption is a complex phenomenon and is rooted in the institutional and societal attributes of a country. The institutional attributes refer to such phenomena as wide discretionary powers of state functionaries, minimal accountability, weak punitive mechanism for corrupt behavior, lack of transparency, extremely low salaries of government employees and absence of incentives for honesty and integrity. The societal attributes include curbs on freedom of expression, tribal affiliations, and allegiances to personal relationships, customs of hospitality and mutual give and take, and low legitimacy of the government.

There is a general agreement that corruption has a negative impact on development. Evidence from all over the globe confirms that corruption harms the poor, hinders economic development, reduces social services and diverts investment away from infrastructure, institutions and social services.

The auditors’ role in fighting corruption is directly related to the political will of the country about anti-corruption. If political will to fight corruption is weak, there is not much the auditors can do. The focus of the Guide is helping the auditors propose reforms that would minimise incentives and opportunities for corruption in the institutions. Without focusing on institutions, the fight against corruption would remain symptomatic.