ATO: Records Key To Bribery Detection  

December 14, 2006: The Australian Taxation Office has toughened its stance on recordkeeping practices in a bid to identify the payment of bribes to public officials.  

In a move that comes off the back of the final report from the Cole Inquiry, the guidelines released this week by the Tax Office are designed to assist auditors in differentiating between legitimate payments to public officials and illegal bribes.

The ATO says the purpose of the guidelines is to identify how taxpayers might conceal bribe transactions to either Australian of foreign public officials, and provide ‘advice on record keeping and audit techniques where bribery is suspected.’ 

When if comes to books and records, the ATO recommends to tax officers hunting bribery offences to look for ‘traditional methods of manipulating books and records.’ These could include organisations keeping two sets of books, alterations to records, false invoices, false documents and a failure to keep adequate and complete records.

The guidelines reflect the Government's duty as a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. While the OECD convention is specific to foreign officials, the ATO has made their guidelines relevant to Australian public officials also.

The Tax Office also uses the guidelines to call for more stringent and detailed records for organisations making payments to developing countries. To assist auditors in determining the nature of payments, recordkeepers will need to keep more detailed records on the reasons for payment, the name of the government official receiving the payment and the total payment amount. The guidelines indicate that payments occurring in countries where bribery is common will primarily be targeted.

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