No Company Is Immune To Bribery, Fraud And Corruption Conduct
Many executives thinking that fraud and corruption are problems faced only by other companies or in other sectors. The percentage of those believing their company's anti-corruption policies are relevant to their work has actually decreased. Now fewer than half say their colleagues would consider the policies relevant.
More than 3,000 board members, executives and managers from 36 countries participated in the annual survey. Among the findings, 42 percent of those surveyed are aware of irregular financial reporting within their own company. Another 57 percent felt corrupt practices are widespread in their country.
The survey also said compliance officials should suffer no illusion that all of their employees are on board with anti-corruption policies. In fact, more than a quarter of sales and marketing respondents said they consider it acceptable to offer gifts or services in order to win or keep business. One in six respondents believes his company's compliance program harms its competitiveness.
The survey is uncomfortable reading due to global unethical conduct. Inflating revenues, underreporting costs or encouraging customers to buy unnecessary stock. This is coupled with the perception that bribery and corruption remain widespread in several markets. Companies have good reason to take a critical look at their numbers. Management needs to ask the right
Managers face increasing pressure to produce results in a tight market, which can include personal pressure in the form of salaries or bonuses. While an average of 60 percent believes their company's managers will be under increased pressure in the next 12 months, that percentage was even higher in certain European countries: 65 percent in Russia, 66 percent in Greece, 74 percent in Norway, and 80 percent in Ireland. That pressure, the report notes, can make unethical behavior all the more tempting.
The pressure to meet short-term financial goals is so great that many respondents say they have witnessed unethical behavior at their own companies. In fact, one in five respondents said they have seen financial manipulation occur in their company. When broken down to the financial services sector, 9 percent have seen revenues recorded before they should have been; 7 percent saw underreporting of costs; and 9 percent said customers were being sold unnecessary products in order to hit sales targets.
The survey showed many executives believe corruption is widespread in their country (57 percent), but not in their sector (26 percent). That discrepancy was even greater in several European nations. In Romania, 61 percent said bribery is widespread in their country, while 19 percent said bribery is common practice in their sector. In Greece, the results were 84 percent versus 29 percent. In Hungary, the results were 70 percent versus 29 percent. Portugal and the Czech Republic had similar results. And in Croatia, 90 percent felt corruption and bribery are widespread in the country, while 40 percent acknowledged it is common practice in their sector.
That so-called perception gap narrowed somewhat in countries including Poland, Italy, Belgium and Austria. Only 37 percent of those surveyed in the UK said bribery is widespread there, and a mere six percent said it is common practice in their sector.
Source:
Ernst & Young's 2013 Europe, Middle East, India and Africa Fraud Survey
