Fifteen percent of chief financial officers around the world are willing to make cash payments to win or retain business, according to a survey of executives interviewed by the accounting firm Ernst & Young LLP.
The firm's annual “global fraud survey” of 400 finance chiefs, interviewed from November to February, found a greater tolerance of bribery compared with the previous year, when 9 percent said they would make cash payments. Five percent of CFOs said they would misstate financial performance, while 3 percent said that the year before, according to the survey.
“One of the most troubling findings of the survey is the widespread acceptance of unethical business practices,” according to the survey released yesterday. “It is particularly alarming that respondents are increasingly willing to make cash payments” and misstate results to survive an economic downturn.
The survey comes amid increased enforcement of the U.S. Foreign Corrupt Practices Act, which bans most payments to government officials overseas, as well as the U.K. Bribery Act and similar measures in other countries. Since 2008, the U.S. has resolved 50 corporate foreign bribery cases, costing companies $3.9 billion in fines and penalties.
1,700 Executives
While companies increased anti-bribery programs, 1,700 executives interviewed in 43 countries expressed “a certain degree of fatigue about anti-corruption compliance initiatives,” according to the survey. Aside from finance chiefs, Ernst & Young interviewed leaders in legal, compliance and audit.
Management is giving mixed messages, meaning “the tone at the top” is diluted by the failure to penalize misconduct, the firm reported. It found that 44 percent of executives believe employees haven't been penalized for violating policies.
“Even if management is strongly communicating that bribery and corruption isn't OK, they don't ever see anyone being punished for that,” Richard Sibery, the firm's leader of fraud and investigations in the Americas, said in a telephone interview. “There are still some questions about whether there is teeth to company policies.”
Ernst & Young, whose global headquarters is in London, is among hundreds of companies worldwide, including accounting and law firms, that compete for business to advise corporations on complying with anti-bribery laws and conducting internal investigations.
While most of the cases involving corrupt payments brought by U.S. prosecutors and regulators involve third parties working for companies, 44 percent of those interviewed said they didn't conduct background checks on such entities, Ernst & Young reported.
Attitudes toward corruption varied by region. Ernst & Young found that 84 percent of respondents in Brazil, where 50 people were interviewed, said they think that bribery and corruption occur widely in the country.
Bloomberg News
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
