After watching the videos what is your initial reaction to the situation? How would you handle it if you worked for Asis? https://www.youtube.com/watch?v=BmXWQm3d2Lw Looking at Exhibit 1 in the book

The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation is the exclusive representative of the copyright holder and prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected] . Copyright © 2011, Northeastern University, College of Business AdministrationVersion: 2011-05-31 Peter Inge, controller for Asis Electronics, a subsidiary of a European-based corporation, reviewed the contract for an order of transmitters for the Ministry of Defense; he immediately noticed receipts totaling $6 million (approximately 20 per cent of the total contract value) that did not seem to be attached to any equipment or serv ices provided by his company. Inge became concerned that Asis may have over- invoiced the ministry and he approached the chief financial officer (CFO) to inquire about the situation: “ What plans do you have with the surplus that is in our system? ” he asked. “ This topic is none of my concern, ” the CFO replied. Inge let the matter rest for several months until he received the annual compliance document requiring his signature. The form was part of an anti-corruption effort implemented by Asis in the 1990s after a bribery scandal resulted in the convictions of several high-level employees. The company also worked with the Organization for Economic Co-operation and Development on the “ Anti-Corruption Convention, ” and it beca me a member of Transparency International, a non-profit organization devoted to reducing corruption around the world. Many considered Asis to be one of the leading companies in the fight against corruption. Asis encouraged its employees to report any irregularities to the compliance department. The company operated under the assumption that every employee should be concerned with the good reputation of Asis in each country in which it operated. In all aspects of performing their jobs, all employees had to focus on maintaining the good reputation of – and respect for – the company. To reduce concerns over potential repercussions for reporting irregularities, Asis established “ protected communications channels ” that ensured confidential ity. Attached to the complianc e form was an anti-corruption handbook (see Exhibit 1 ). Inge reviewed the contents to see if he could find any guidance that might help him decide what to do concerning the possible overpayment. Exhibit 1   Asis Electronics307 Anti-Corruption H andbook ( Abridged) Table o f C ontents 1 Gifts and hospitality 2 Payments for routine action (prohibited) 3 Company political contributions (prohibited) 4 Company charitable donations 5 Sponsorships 6 Intermediaries 7 Record keeping and accurate recording 8 Acquisitions, joint ventures, and minority interests 2 P ayments f or r outine a ction ( prohibited) What is this about and why is it an issue? They are small payments made to lower-level government or private sector employees, as a personal benefit to them, to secure or speed-up the performance of a routine action to which the payer is entitled. These are sometimes known as facilitating payments. These are an issue because:   They are a form of corruption.

Payments for routine action are illegal in almost all countries.

Paying for routine government action could easily open the door to more serious issues of corruption. What is the Asis policy? Asis prohibits payments for routine action.

What does this mean in practice?   If you make a payment that could possibly be misunderstood as a payment to facilitate routine action, you must notify your responsible Compliance Officer and make sure that it is properly documented and posted to the correct account.

Consult your responsible Compliance Officer when you encounter anything that looks like a request for a payment to facilitate a routine action. Such practical problems do arise in everyday business in some countries, but there are usually other ways that Asis can solve these kinds of issues.

Never attempt to disguise such a payment as something else. The penalties for disguising such a payment are much greater than the penalties for making one! How do I go about getting approval? Approval will not be given. 7 R ecord k eeping a nd a ccurate r ecording What is this about and why is it an issue? Books and records is a general term used in this guide to describe all business records. It incl udes accounts, correspondence, memoranda, tapes, discs, papers, books, and any other documents. It is import ant because the various308 legal codes require that we maintain accurate and complete books and records. In order to combat corruptio n it is important that transactions are transparent, fully documented and coded to accounts that accurately reflect their nature.

Attempting to conceal a payment can create a worse violation than the payment itself. What is the Asis policy?   Asis books and records must be kept with reasonable detail and accuracy so that they correctly reflect all transactions.

All controls and approval procedures must be followed.

Asis books and records must not contain any false, misleading, or other artificial entries. What does this mean in practice?   Ensure that all your own transactions are fully documented, correctly approved, and coded to the correct expense description.

If you are aware or suspect that anyone is directly or indirectly falsifying the books and records or in any other way attempting to disguise a payment, you must report your concern immediately to the “Compliance Helpdesk – Tell Us”.309