For treasurers and other finance managers who've spent their careers in the United States, bribery and corruption may seem far-removed from reality. But for those who are responsible for financial management in other parts of the world, an insular attitude may be setting them—and their companies—up for some unpleasant surprises. A recent global study by Ernst & Young titled “Navigating today's complex business risks: Europe, Middle East, India, and Africa Fraud Survey 2013” reveals that some activities which seem taboo to most businesspeople in the United States are not as uncommon in the developing world.

“Sometimes it's a challenge for U.S.-based finance managers or treasury folks who have never worked abroad to understand that people in their foreign subsidiaries may have a completely different perspective on how the world works,” says Brian Loughman, Americas leader for fraud investigation and dispute services with Ernst & Young. “That can lead to attitudes that could be very prevalent in India or Africa but would be incomprehensible to the average American. The culture will have an impact on how transactions get recorded. It will have an impact on the level of detail that gets recorded in the system, on what people think of as being normal, and on what people think is important versus what they think isn't important.”

The survey polled more than 3,000 board members, executives, managers, and employees in 36 countries around the world. In rapid-growth markets, 26 percent of respondents have heard of people “cooking the books” in their company within the past year; see Figure 1, below. In the developed world, this number is half as large, although among respondents from all regions of the globe, 42 percent of board members and 24 percent of finance staff are aware of occurrences of financial manipulation in their organization.