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Tempe, AZ March 1, 2018

The Exam Unit of The American Anti-Corruption Institute launched today the official registration for the Certified Anti-Corruption Manager (CACM) Exam Path in eight countries: U.S.A., Canada, Netherlands, Kuala Lumpur, Jordan, Palestine, Qatar, and U.A.E.

CACM members are qualified Certified Anti-Corruption Manager ®©(CACM). It is the international premier professional qualification that distinguishes management possessing the required cutting-edge knowledge and skills to fight fraud and corruption from its management position.

The AACI is the only global Institute that offers such a rigorous and disciplined scheme to qualify management to fight corruption. The CACM is not technical, yet it capitalizes on the management science and the technical skills management usually has. The CACM syllabus shows the table of contents of the CACM Review textbook and the subjects that are tested in the CACM online exam.

Citizens or permanent residents of these countries applying for the CACM shall sit for the CACM online exam. To help CACM candidate study and prepare for the exam, the Exam Unit published the CACM review textbook; the only official CACM review book. The CACM review textbook covers the CACM syllabus and includes hundreds of questions.

The eligibility requirements to apply for the CACM are as follow: A CACM candidate shall

Have a bachelor degree from an accredited college or university, and

Have three years of experience in a managerial position accompanied with managerial responsibilities, and

Pass the Certified Anti-Corruption Manager ®©(CACM) ®© online exam, and

Provide an assertion to non-prior indictment in any act to the discredit of the code of ethics of The Institute, and

Abide by The AACI code of ethics, and

Satisfy The AACI continuing professional educational (CPE) requirements, and

Maintain a good standing and membership in The Institute

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Mike J. Masoud, CPA, CACM, CFE, MBA

سيادة القانون: الفجوة ما بين الإرادة السياسية والتطبيق

مايك مسعود و د. عمر الداوود جريدة الرأي الأردنية ١٠ شباط ٢٠١٨

إننا ومن موقع المراقب والخبير، لم نُفاجأ مطلقاً من غضب جلالة الملك عبد الله الثاني المعظَّم من النتائج الفعلية الملموسة للأوراق النقاشية الملكية وما حققته من أهداف لغاية الآن من خلال ترجمتها لإستراتيجيات وبرامج عمل في كافة القطاعات الإقتصادية. وانطلاقاً من تخصصنا، فإننا سنجتهد في تناول الورقة النقاشية الملكية السادسة لإستنطاق النتائج التي حققتها على الأرض و محاولة الوقوف على الأسباب التي أدَّت لذلك، فإن أصبنا فلنا أجران وإن أخطأنا فلنا أجر.

ونود في البداية أن ن نُؤكد على حقيقة يجهلها الكثيرون وهو أنه لا يوجد حتى الآن ملك او رئيس أو أمير يمثل رأس الهرم للنظام السياسي في بلده أصدر أو أعلن شفاهة أو كتابة توجُّها سياسياً كما فعل جلالة الملك عبد الله الثاني المعظم في الورقة النقاشية السادسة. هذا ما أكده رئيس المعهد الأمريكي لمكافحة الفساد في عمَّان خلال ندوة متخصصة تم عقدها في الشهر الماضي تحت رعاية دولة الدكتور عبدالله النسور رئيس الوزراء السابق والتي أعلن خلالها المعهد الأمريكي لمكافحة الفساد اعتماد الورقة السادسة في منهاجه الخاص بتأهيل المدراء لمكافحة الفساد.

لذلك، فإن موضوعية التقييم تقتضي الإقرار بأنه يوجد في الأردن إرادة ورغبة وقرار سياسي ومن أعلى هرم في منظومة الحكم باعتماد مبادئ الشفافية والمسؤولية والمحاسبة والشفافية واعتماد نظم الإدارة الفعالة والتطبيق الفعّال للرقابة الداخلية والحاكمية الرشيدة والارتقاء بآلية اتخاذ القرار وذلك في القطاعين العام والخاص ومؤسسات المجتمع المدني. هذا بالإضافة إلى اعتماد مبدأ الكفاءة ومحاربة الواسطة والمحسوبية والفساد، وتطبيق إصلاحات ادارية وفنية في قطاع القضاء والمحافظة على فعاليته واستقلاله. اضافة الى التأكيد على مفهوم سيادة القانون وربط مفهوم الولاء والمواطنة الصالحة بمقدار الالتزام بالقانون واحترام سيادة واستقلالية القضاء ومحاربة الواسطة والمحسوبية والفساد. لقد ورد كل ذلك في الورقة النقاشية الملكية السادسة.

لإستكمال قراءة المقال، يمكنك زيارة موقع جريدة الرأي الأردنية من خلال هذا الرابط

مايك مسعود، مدير المعهد الأمريكي لمكافحة الفساد — الشرق الأوسط وافريقيا

[email protected]

د. عمر الداود، المؤسس والمدير العام لمركز القانون والحوكمة

December 26, 2017

As 2017 will be closing its chapter in few days, and 2018 has many fraud and corruption scandals looming on the horizon, I contemplate the corporate of developing countries and the actual role of the board of directors in preventing and deterring corruption, money laundering, and financing terrorism. While my views in this article may look like a critique, they underscore severe flows that are permeating in most of these boards. I prefer to have my opinions be perceived as an expert advice directed to the board and its members.

Before I embark on delineating my viewpoints, I want to assert on the following points:

Organizations, listed or unlisted, are social organs. An organization’s culture is affected by the country’s culture, values, and norms in which it operates.

Prevalence of the rule of law differs from one country to another.

The political will to fight corruption differs from one country to another.

Prevalence of corruption and nepotism differs among these countries.

There are different governance regimes in these countries.

These countries have different poverty, illiteracy, and unemployment rates.

Economic growth varies among these countries

The economy of some of these countries is profoundly dependent on natural resources such as oil and gas.

The majority of local investors in these countries are unsophisticated.

In most of these countries, transparency, accountability, and integrity qualities in business dealings are poor.

The true Independence and effectiveness of the judicial system in most of these countries is, at best, vulnerable.

There are substantial doubts about the enforceability of court judgments in most of these countries.

The competence and effectiveness of regulatory agencies monitoring organizations, listed and unlisted, business conduct is poor.

The audit profession in most of these countries is at best inadequate and complicit in many countries.

Having stated that, I am aware of the environment in which the boards operate mainly in the Middle Eastern and African countries.

The board responsibility and its members’ rights and duties are primarily determined by the country’s corporate law. The board and its members must always make business and economic decisions in the best interest of the organization. For each decision, they should obtain and study all the relevant information diligently. However, board members should be competent enough to make informed decisions. But what determines the competency of a board member? A board member competency is met by fulfilling several corporate law requirements. Those requirements are beyond the scope of this article.

What I am concerned with is the board member’s anti-corruption intelligence. The American Anti-Corruption Institute (AACI) coined the “anti-corruption intelligence” 1 term to determine ” the minimum, optimum knowledge a decision maker should have to avoid fraud and corruption intelligently. Such knowledge includes the proper blend of due diligence, internal controls, anti-corruption, governance, decision making, process auditing ( from a management perspective and duties) to avoid anti-corruption and fraud.” Financial and nonfinancial information live in both the pillars of the anti-corruption concept and each of the board decisions. The critical and common sense questions are: First, do the board members of corporations (listed and unlisted) of the Middle East and Africa possess anti-corruption intelligence? Second, are they required to have a reasonable financial and business competence?

The first question. Though I could not figure out reliable and independently published stats, I have substantial doubts that board members have proper and adequate anti-corruption intelligence. Based on first-hand experience and information, these boards, in most of the cases, do not have the appropriate knowledge about due diligence, internal controls, anti-corruption, governance, decision making, process auditing ( from a management perspective and duties) to avoid anti-corruption, fraud, money laundering, and fighting terrorism.

The second question. Each of these boards relies upon its accounting and management information systems in most of its business and economic decisions. In most, if not all, these countries, organizations use the International Financial Reporting Standards (IFRS) to prepare and fairly present financial statements 2. The board should usually approve the audited financial statements before they are released. Again, the common sense says that a board member who approves the audited financial statements is presumed to know what the auditor’s report says and what the accompanying financial statements purport. Does he? Some of you may say, well, the board has an audit committee that handles the required financial and business expertise of the board. I do not believe that the audit committee waives the board members of their duties in this regard or their associated legal liability. Let me articulate on this question.

IAS 1 states that 3 “users are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence.” Even though users, referred to in IAS 1, indicates to external users of financial statements, I think that those who approve and oversee the financial reporting process should initially possess the presumed reasonable knowledge of the external users of financial statements. It seems to me that the answer to the second question becomes clear: the board members are required to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence. The anti-corruption intelligence concept includes such reasonable knowledge, as required by IAS 1. I am skeptical and have serious concerns about the board members competencies to meet the designated necessary reasonable knowledge. There are probably few organizations who are excellent and have adequate anti-corruption intelligence, but I believe they are not many.

Trying to avoid discussing the reasons underlying the boards’ anti-corruption illiteracy (accounting illiteracy included), I want to reiterate that the environment in which organizations do business have a significant bearing.

When the board members do not have adequate anti-corruption intelligence, and the board is dominated by one or two of its members, and the organization’s external culture characteristics are more or less as stated above, what would be the consequences? Though I have a short answer, let me list part of the considerable damages.

The capital allocation will be inefficient and elusive

The stock markets and exchanges will not function transparently and will not reflect the realities of the economy

There will be much-untapped innovation and productivity

Corruption, money laundering, and financing terrorism thrive

Talents leave the country, as nepotism is the norm rather than the exception

Quality of public goods and services deteriorates, and public trust in local products and services worsen

Healthcare and educational services quality degenerate

Board membership loses its substance. Individuals seek for the membership to gain a social status and probably some remuneration.

Lack of foreign direct investment. Prudent investors will not invest in organizations governed by such boards! Even when a foreign investor is on the board, the risks at stakes are high.

Despite the gloomy board characteristics I discussed above, I have no doubts that there are boards whose members are smart, ethical, and honest. Chaired by educated, charismatic individuals, those boards are trying to do all that they can in the best interest of their organizations, communities, and countries. There are many organizations in the Middle East and Africa whose leaders are open to all that may help them meet their organizational and legal duties. I can see a new breed of visionary corporate leaders and entrepreneurs in the Middle East and Africa leading by example, having adequate anti-corruption intelligence, and instilling transparency, responsibility, and accountability in their daily routine business and economic decisions. I know many of them and proud to call them friends.

I sincerely believe that only board members who have adequate anti-corruption intelligence can make a difference in preventing and deterring corruption, money laundering, and financing terrorism. Reckless, careless, incompetent boards and board members will not. On the contrary, they pose serious, relevant socioeconomic and political risks.

Finally, I wish all boards and board members in the Middle East, Africa and the rest of developing countries happy new year.

Notes:

The First Interview with Mr. L.b.Files, president of The AACI, October 3, 2017, http://bit.ly/2fTdqMB

The financial statements in this context are the general purpose financial statements as defined by IAS 1 or FASB. General purpose financial statements consist of 1- balance sheet, 2- income statement, 3- statement of changes in equity, 4- statement of cash flows, and 5- notes to the financial statements that are an integral part of these financial statements.

International Accounting Standards Board, International Financial Reporting Standards, IFRS, International Accounting Standard 1: Presentation of Financial Statements, Part A, par. 7, Page A292, 2010

Initially published at blog.theaaci.com on December 26, 2017

Tempe, December 1, 2017; Technical Staff

This document is a part of The AACI series of anti-corruption resources made available to our CACM members. The contents of this document constitute an integral part of the CACM Review textbook that would be available in countries where the CACM will only be offered by exam.

Misconceptions About Fraud and Corruption

The following is not an exhaustive list of misconceptions about fraud and corruption that is widely spread all over the world. The lower the illiteracy, the lower the level of these misconceptions. The higher the anti-corruption literacy, the lower the level of these misconceptions.

Corruption exists only in the public sector. This is wrong. Corruption may exist in any entity of any economic sector.

A government can eradicate corruption in a short period. For example, a country can defeat corruption in three to five years. This is almost impossible. First, a state or entity will never be 100% corruption free. Second, no one estimate would fit all the situations. Third, it depends on the scope and depth of corruption. In general, a country that is faithful and dedicated to fighting corruption would need at least 12 years to start reaping the results of its corruption prevention strategies.

The political will is enough to combat corruption. This is wrong. Though the political will, at the highest level of governance, is necessary to unleash faithful corruption prevention strategies, a mere political will is not enough to prevent fraud and corruption.

A country is corrupt. This is wrong. The correct statement is that there are individuals who are corrupt.

A public perception index tells the whole story about corruption in a country. This is wrong. Any public perception index indicates the level of corruption those surveyed believe corruption exists in the country as a whole. Such an index does not provide sufficient and reliable information about the actual levels of corruption in an entity, economic sector, or the country as a whole.

Costs and Damages of Fraud and Corruption

Corruption results in severe socio-economic damages. The Secretary-General’s message on 2016 International Anti-Corruption Day described the extent of those damages succinctly.

“No country is immune, and every country bears a responsibility to end it. [corruption]

Corruption strangles people, communities, and nations. It weakens education and health, undermines electoral processes and reinforces injustices by perverting criminal justice systems and the rule of law. By diverting domestic and foreign funds, corruption wrecks economic and social development and increases poverty.It harms everyone, but the poor and vulnerable suffer most.

The theme of this year’s observance is “Corruption: An impediment to the Sustainable Development Goals”. Goal 16 urges substantial reductions in corruption and bribery and the development of effective, accountable and transparent institutions at all levels. The UN Convention against Corruption, buttressed by its peer review mechanism, is mobilizing action for honest, transparent, accountable governance, but far more is needed.”

As stated by the U.N. Secretary-General, corruption:

Strangles people, communities, and nations

Weakens education and health

Undermines electoral processes

Reinforces injustices by perverting criminal justice systems and the rule of law

By diverting domestic and foreign funds, it wrecks economic and social development and increases poverty

Harms everyone, but the poor and vulnerable suffer most

Because clandestine is the nature of fraud and corruption, its real cost is an estimate.

Members may continue reading on the membership portal.

The First Interview with Mr. L. B. Files, president of The American Anti-Corruption Institute (AACI)

October 3, 2017, Tempe, Arizona

As The American Anti-Corruption Institute's (AACI) journey approached five years since launching its operations in late 2012, fraud and corruption scandals continued to make headlines. Though the Volkswagen Dieselgate costs exceeded $30bn to date, and Samsung's CEO will spend time in prison for corruption charges, the corporate world does not seem to be paying attention. Corruption removed several heads of states from power, in South Korea, Brazil, a senator in the United States, UN officials and Ambassadors and, EU officials.

Despite the setbacks, or maybe because of the exposure, the global political landscape became more determined than ever to fight graft. For the first time, the United States equated the efforts of combating corruption to the fighting financing terrorism.

Fighting corruption has, in fact, became a prerequisite to fighting financing terrorism. Amid the global turmoil of corruption, the media and public relations of The AACI met Mr. L. Burke Files, the president of The AACI, at its headquarter in Tempe, Arizona to discuss The AACI's global efforts in fighting corruption, among other relevant issues.

The AACI: On behalf of our members, constituents, and advocates worldwide, we thank you Mr. Files for this opportunity to answer our questions.

Files: You are most welcome.

The AACI: As you know, corruption is a prevalent phenomenon hitting all over the world. How do you evaluate the commitment of the international community to fighting corruption?

Files: The 1977 Foreign Corrupt Practice Act, The United Nations Convention against Corruption (2005), the UK 2010 Bribery Act and those of the OECD relevant anti-corruption demonstrate an unprecedented global commitment to unequivocally fighting corruption. The most explicit U.S. message in this regard came at the May 2016 London anti-corruption summit where John Kerry, the former US Secretary of State said:  “We are fighting a battle, all of us. Corruption, writ large, is as much of an enemy, because it destroys nation states, as some of the extremists we are fighting or the other challenges we face." This proclamation changed the global landscape for fighting corruption. It tied, in public, for the first time, combating terrorism and combating corruption.

"This proclamation changed the global landscape for fighting corruption. It tied, in public, for the first time, combating terrorism and combating corruption."