An expert on corruption in the corporate world says allegations of dodgy deals at Leighton Holdings show the lack of respect for and authority in Australia’s regulatory bodies.

Reports this week claim Leighton CEO Wal King approved $42 million of payments to a firm as a way to hide investments coming from Iraq.

Mr King strongly denies the allegations made in the Fairfax media newspaper reports, saying he will release a statement.

Forensic accountant Owain Stone says this kind of bribery, funnelling and kickbacks are common offer put to companies working in developing economies.

“Transparency International provides some very good feedback on the level of risk of fraud and corruption occurring in particular locations, and a location like Iraq would be considered very high-risk,” he said.

“For companies operating in any offshore locations the risk of fraud and corruption is probably greater than it is in Australia, but that doesn't mean it's entirely unique to offshore locations.”

Certain parts of the case were allegedly referred to the Australian Federal Police voluntarily by Leighton some years ago. However questions have been asked as to why allegations in such a high-profile and high-profit company were not at least referred to experts in the Australian Securities and Investments Commission (ASIC).

ASIC officials say it falls under the jurisdiction of the Commonwealth Criminal Code and therefore the Federal Police.

“Transparency International has been consistently critical of the Australian Government and state government actions in respect to bribery and corruption,” Mr Stone said.

“There been a significant amount of criticism about the lack of prosecutions. So you have to go back to the stage before the question of whether or not penalties are sufficient.”

“People just aren't being prosecuted.”

Among similarly prominent cases currently underway the Reserve bank of Australia is facing allegations that its subsidiary Note Printing Australia was involved in shady dealings to sell polymer bank notes to Saddam Hussein’s officials in the late 1990s.