Growing Beyond: a place for integrity
The India story
If we lose a contract because a bribe wasn’t paid, there’s a risk the focus will be on the lost sale; but we should be strongly rewarding this behavior.” - Survey respondent, India
Ernst & Young undertook the 12th Global Fraud Survey as part of our flagship program, Growing Beyond.
We interviewed CFOs and heads of legal, compliance and internal audit, to get their views of fraud, bribery and corruption risk and how their organizations are mitigating them. Between November 2011 and February 2012, our researchers conducted a total of 1,758 interviews with employees in 43 countries covering North America, Latin America, Europe, Africa, Middle East, Far East and Oceania.
In India, 50 interviews were conducted and results were compared with findings for Western Europe and North America. Below is a summary of the findings based on respondents in India:
- 70% think that bribery and corruption are widespread in the country (global 39%)
- 28% are willing to make cash payments to win or retain business (global 15%)
- 16% feel it is justified to misstate financial performance in order to help their business survive (global 5%)
- Over 70% think that the board needs a more detailed understanding of the business to be an effective safeguard against fraud, bribery and corruption (global 51%)
- 84% believe in more supervision by regulators and government to reduce the risk of fraud, bribery and corruption (global 69%)
- 78% said that anti-bribery and corruption policies and codes of conduct are in place (global 81%); while 66% said that there is no training on such policies (global 45%)
- 88% put the most confidence in regular internal audits (global 86%) for compliance monitoring, and 76% in audits by external auditor (global 75%)
- 22% record that pre-acquisition due diligence into fraud and corruption related risks is ‘always’ conducted, while 52% of companies never or infrequently perform this critical work during a transaction
- 79% of companies infrequently or never carry out post-acquisition due diligence, compared to 38% in W. Europe, 20% in N. America and 41% on a global average.
The survey also found that:
Actions that are justified to help a business survive
- Indian companies looking to invest overseas are more concerned about the new risks arising out of investments in new markets (70%) compared to Western Europe (61%) and global average (63%).
- Indian companies have limited awareness about the possible liability for the actions of their third party agents as 24% respondents said that third party alone is liable for its own action (global 14%). However, in comparison to the global average, more Indian companies have adopted systems or processes to manage and monitor third party relationships.
- Globally, only 22% respondents are in favour of whistleblower bounty schemes. Surprisingly, 44% India respondents are in support of such schemes.