Page 47 - CMA Journal (May-June 2025)

Focus Section

There may even be internal collusion that weakens
internal controls. These losses place an additional burden
on businesses, forcing them to conduct cost audits or take
legal action—both of which add to operational expenses.
Corruption increases the overall cost of doing business in
a country and damages the country’s reputation, making
it less attractive for both local and foreign investors. Once
a country’s image is tarnished, it becomes difficult to
attract new investment and restore public and
international trust.
Due to the persistence of corruption, businesses that are
unable or unwilling to pay bribes or kickbacks may be
excluded from valuable tenders or denied certain
contracts and licenses. This leads to an increase in the
operational costs of key projects. Over time, the
normalization of these unlawful practices creates a toxic
business environment where corruption-related costs are root causes, engagement with organizations like
treated as regular expenses—ultimately driving up prices Transparency International, and adopting best
for everyone. practices from other countries can significantly help
reduce corruption and its related costs.
Ways to Stop Corruption and Its Effects
e) Role of Media and Public Awareness: Media—both
To address corruption and its impact on operational social and mainstream—can play a crucial role in
costs, a multi-dimensional effort is required. Below are raising public awareness and promoting a culture of
some practical measures to help prevent corruption: accountability. Awareness campaigns should
a) Strengthening Institutions: Government institu- educate citizens about their rights and encourage
tions such as the Anti-Corruption Department, them to take a stand against corruption. A
National Accountability Bureau, Tax Collection well-informed public is one of the strongest defenses
Authorities, and the country’s Judicial System should against corrupt practices.
be made independent and as strong as possible. Conclusion
These institutions must be empowered to monitor
and control corruption effectively across all sectors. There can be many reasons for increased operational
costs for a business or a country, but when this increase is
b) Ensuring Transparency: Corruption can be reduced
linked to corruption, it reflects the state of the rule of law
by promoting transparency, such as granting the
and the mindset of the people. Whenever costs begin to
public easy access to government records,
rise, several measures are taken to control and reduce
implementing online tendering for public projects,
them, but this always requires a clear identification of the
and conducting independent audits. Adopting
root cause. Corruption can be difficult to overcome and
international frameworks like the United Nations
involves the engagement of multiple stakeholders.
Convention Against Corruption can also help
improve transparency and accountability. Corruption is a major challenge affecting many countries,
including Pakistan. To combat it, bribery, nepotism, and
c) Expanding Online Services: The government
favoritism in both government and business sectors
should provide digital platforms that allow citizens
must be prevented. This can only be achieved if the
to interact directly with public institutions,
country's law-enforcement institutions are first made free
minimizing or eliminating contact with
of corruption and strengthened to the highest possible
departmental officials. Services such as online
level. Only then can a country reduce operational costs
voting, tax filing and payment, property registration,
and foster a business environment—across both public
and license or permit applications should be made
and private sectors—where efficiency thrives and
accessible, secure, and user-friendly. This approach
sustainable economic growth becomes possible.
will reduce opportunities for corruption and build
public trust. About the Author: The writer is an Associate Member of ICMA
Pakistan and currently working for Prestige Kitchens Pvt. Ltd. as
d) International Collaboration and Research: Working Finance Manager. He has vast experience working with national and
with the international community can offer valuable multinational companies in Pakistan and abroad particularly in
insights and support for combating corruption. UAE and Saudi Arabia. He has a particular interest in current affairs
and economy.
In-depth research at the national level to identify
ICMA’s Chartered Management Accountant, May-June 2025 45