The need for technical auditing in the Zambian construction Industry
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Date
2011-07-14
Authors
Mwiya, Balimu
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Abstract
The scale of corruption is magnified by the size and scope of the construction sector,
estimated globally at US$3,200 billion per year (Transparency International, 2005). As
economic crimes such as fraud, bid-rigging, bribery, collusion, coercion and extortion
have grown worldwide, so has the fight against them taken centre stage. The
construction industry being a multi-billion dollar complex industry makes it a suitable
breeding ground for these economic crimes that have remained an impediment to
development. To uphold the high ethical standards required in the industry,
stakeholders need to introduce and facilitate proactive strategies for the prevention of
economic crimes. One such strategy is the introduction of regulatory technical auditing
on construction projects. Technical auditing is currently not contractually recognized
in any form of contract used in the Zambian construction industry.
The aim of the research was to develop a technical audit model to be used in the
auditing of construction projects in Zambia to lower construction costs and tackle
unethical practices in the industry. The objectives of the study were to investigate the
nature and form of economic crimes in the Zambian construction industry and
establish whether existing institutions had the capacity to expose and prevent such
criminal activities. The study further examined the benefits of technical auditing, and
whether technical audits were the answer to reducing economic crimes in Zambia's
construction industry. The research also investigated whether whistle blowing systems,
contractor blacklisting and deregistration of consultants from their professional bodies
were adequate deterrents of corrupt practices.
To investigate the unethical practices in the construction industry cited in literature, the
data collection techniques included literature review, structured interviews,
questionnaire surveys and case studies. A best practice technical audit model was
developed and validated by industry stakeholders.
The study established that introduction of pro-active technical auditing, through the
appointment of technical auditors and incorporation of audits at planning stages of
projects, would be an effective measure in uncovering and preventing or minimizing
unethical practices in construction. It was further established that the highest ranked
benefit of technical auditing was client confidence. Increased client confidence would
ensure more investment, ultimately increasing the country's economic activity in the
sector.
It is expected that information brought out in this study may be useful in raising
awareness of economic crimes, development of prevention strategies and assist in
developing necessary policies and guidelines for the introduction of regulatory
technical auditing of construction projects in Zambia, and elsewhere.
The study, though, had some limitations that need to be considered when interpreting
the reported results. Limitations such as the scarcity of literature on technical auditing
in Zambia, the large geographical coverage of Zambia, which was the study area, nonresponse from the supplier sector and the absence of an internationally accepted
definition of economic crime could be cited as weakness in the study. Varying
interpretations by respondents could probably have had an influence on the results
reported in the paper. However, some of the identified limitations could be addressed
through further studies.
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Keywords
Technical auditing , Economic Crimes , Unethical Practices , Construction Industry,Zambia