Ernst and Young (EY) have released their annual Global Fraud Survey results which follows the questioning of over 2,700 board members, executives, managers and teams from a broad range of businesses across 59 countries. The Global Survey presents an overview of global opinion on fraud, bribery and corruption and the matters which are, or should be, of greatest concern to businesses throughout the world.
New and emerging risks such as cybercrime, which has hit at least 93% of the UK's big businesses in the past financial year, are identified in the survey report as being underappreciated. Cybercrime was considered by 67% of respondents to the survey as a low or low / fairly low risk. At the outset, there is little a company can do to mitigate a risk it does not believe exists. The report serves as a much needed reminder to companies to be aware of the new risks continually arising in ever-changing markets as well as the more traditional risks of fraud.
Following a bout of anti-corruption and anti-bribery legislation throughout the world most companies have an awareness of their obligations and have made an attempt to comply. Worryingly the survey results suggest that the enthusiasm for compliance is now dwindling with little change over the past two years in the uptake of policies and training. Commitment to anti-bribery and anti-corruption compliance requires more than the introduction of an anti-bribery policy, although a robust anti-bribery policy is a good start. A rather alarming one in five respondents indicated that their businesses did not have anti-bribery and other relevant policies in place. Equally concerning is the evidence of a lack of support and training for businesses, which are operating in emerging markets, where bribery and corruption present a greater risk.
A critical issue highlighted by the survey is the lack of involvement and participation of senior management and board members, in relation to anti-bribery and anti-corruption training and procedures and the requirements for compliance. These results suggest an apathetic approach by senior management. Boards and senior officers of companies are encouraged to review their own perceptions of bribery and corruption and become more involved in compliance and training. The essence of the survey report is very much that companies should be cascading a strategy of "lead by example".
EY accompanied their results with the startling statement, "our survey results over the past 10 years point towards a structural level of unethical and illegal conduct whose impact businesses must seek to minimise". It is clear that such conduct is pervasive throughout all industries and in all countries and at a time when financial circumstances remain uncertain and anti-corruption and anti-bribery agencies are drawing together to crack down on illegal conduct it is vital that businesses are prepared to deal with the issues they encounter.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
