Businesses must tighten procedures to prevent corruption among external business partners or see directors ending up in prison, warns accountancy firm Ernst & Young.

The newly-introduced UK Bribery act means companies must demonstrate they have ‘adequate procedures’ in place to address third party risks – including employees and outsourced business. If they are not compliant companies can be fined or executives imprisoned.

The firm’s analysis of 225 background checks showed that half of red flags raised against these vettings were due to potentially corrupt government links.

Ernst & Young also found that healthcare and life sciences companies are among the most likely to carry out background checks, while they are also commonplace in transportation and hospitality firms.

Paul Walker, head of forensic technology & eDiscovery services for Europe, the Middle East, India and Africa at Ernst & Young, says: “While background checks help to prompt suspicion, it is also important to resolve unanswered questions before ultimately appointing partners who may ultimately be acting in your name.

“For instance, how did a potential partner achieve such strong levels of success in a highly competitive market? How will they represent your business? This will help to prevent companies being unwittingly tainted by corruption.”