Politically exposed persons (PEPs): risks and mitigation
Purpose – The purpose of this paper is to consider the risks posed by politically exposed persons (PEPs) and explain the money laundering risk when entering into financial transactions and business relationships with PEPs. Risk mitigation by regulated entities and corruption prevention strategies are also outlined. To minimise money‐laundering risks associated with PEPs, legislation will need to adapt to deal with threats that organized criminals and terrorists seek to exploit. Future directions for research in relation to PEPs are also identified.Design/methodology/approach – An analysis of how regulated entities can reduce their risk of money laundering when entering into financial transactions and business relationships with PEPs is presented.Findings – It was found that there is a need to harmonise legally enforceable obligations targeting PEPs. PEP monitoring, arguably, should be extended to individuals holding prominent public functions in their own jurisdictions, individuals exercising functions no...
Evolving challenges for supreme audit institutions in struggling with corruption
Purpose – To discuss the theoretical framework for involvement of supreme audit institutions (SAIs) in anti‐corruption struggle and their contributions in practice.Design/methodology/approach – The paper presents a theoretical and practical discussion on both direct and indirect contributions of SAIs in fighting with corruption. To this end, it covers a comprehensive analysis of SAIs in terms of separation of power, audit evidence, transparency, investigative power and accountability. Hence, cornerstone documents concerning the subject matter of the paper have been scrutinized so as to evaluate the role of SAIs in detail.Findings – Active participation of SAIs which have financial, organizational, operational and functional independence and audit mandate guaranteed by constitutions and laws is essential in order for deterring corruption by promoting accountability, openness and good governance public‐financial management. Furthermore, it is likely that SAIs detect some suspicious cases of corruption even ...
Features and functions of supreme audit institutions
Supreme audit institutions are national agencies responsible for auditing government revenue and spending. Their legal mandates, reporting relationships, and effectiveness vary, reflecting different governance systems and government policies. But their primary purpose is to oversee the management of public funds and the quality and credibility of governments' reported financial data. In the past the World Bank and other donors often established parallel auditing systems for their projects, undermining developing countries' supreme audit institutions, on whose work they could not always rely. Equally problematic have been projects that encouraged performance auditing but ignored basic weaknesses in financial management. In recent years the Bank has tried to strengthen oversight agencies such as supreme audit institutions. This note is intended to help Bank staff appreciate the role and nature of these institutions, particularly in managing public spending, ensuring financial accountability, and strengthening public institutions.