58.3 9 marker

Question 1

The sales staff amend the prices in the online catalogue on the oral authority of the sales
director. No check is made on the amendments.

Answer 1

Consequences
The sales staff may:
* misunderstand the oral instructions
* input incorrect prices
* make unauthorised amendments.
Instruments may be sold at sub-optimal prices leading to lower profits and an adverse effect
on cash flow.
Instruments maybe overpriced leading to loss of customer goodwill and reduced demand for
LEL’s products.

Recommendations
* All amendments to be recorded on a standard form
* The standard form should be signed by the sales director
* A printout of amendments to be obtained and checked to the standard form and the
printout should be signed as evidence of review
* Periodic checking of all prices to the authorised price list

Question 2

LEL does not have any bribery prevention policies in place.

Answer 2

Consequences

The Bribery Act 2010 makes bribery or failing to prevent bribery a criminal offence. The Bribery
Act is global in scope and holds the company responsible for the actions of its employees. The
company is liable if employees or persons associated with the company offer, accept or bribe
a foreign public official. The absence of policies means that employees may offer or accept
bribes without realising the consequences or do not know what to do if they suspect bribery.
The penalties for bribery or failing to prevent bribery are severe and include fines and
imprisonment.
The financial results of the company may be adversely affected. There could be additional
expenses arising through the:
ICAEW 2022 December 2017 exam questions 413
* payment of bribes
* cost of any fines or penalties imposed by the authorities
* cost of legal fees to resolve any bribery issues.
There may be regulatory investigations and adverse publicity leading to a reduction in sales.
Ultimately, the going concern status may be threatened as the company may have its licence to
trade revoked.
Furthermore, external auditors have a duty to report suspicions of bribery to the National
Crime Agency as required by the Proceeds of Crime Act.

Recommendations
* Document and implement bribery prevention policies
* Introduce a whistle-blowing policy and procedures for reporting bribery
* Appoint a designated person responsible for compliance
* The bribery policies should be communicated to all employees
* Policies should be based on Government (Ministry of Justice) guidelines which set out the
following principles:
– Proportionate procedures to mitigate risks
– Top level commitment/anti-bribery culture
– Risk assessment to identify bribery
– Due diligence procedures
– Embedded culture of bribery prevention
– Making improvements to procedures when necessary.