A combination of sluggish growth, complacency, and outright greed is leading to a “do whatever it takes” mentality in the business world — even if that means cooking the books or conducting other acts of fraud.
Out of almost 3,500 employees polled in 36 countries around the globe, one in five admit to being aware of financial manipulation in their own companies over the past year, according to the latest survey from Ernst & Young. Furthermore, 42 percent of board directors and top managers were aware of irregular financial reporting at their employers. The regions in the survey include: Europe, the Middle East, Africa, and India.
The amount of fraud is more pronounced in high-growth markets, where over 25 percent of respondents are witnessing financial manipulation. Almost 50 percent of respondents in these areas believe that companies in their countries often deceive when it comes to financial performance, compared to 29 percent in Western Europe.
Brian Loughman, Americas Leader of Fraud Investigation & Dispute Services for the global Ernst & Young organization says, “For U.S.-based executives responsible for businesses in these regions, such findings should be cause for concern. The possibility of inaccurate financial reporting to headquarters, or corrupt payments being made to secure sales, undermines the parent company and could expose it to enforcement action by regulators.”