EY - Overcoming compliance fatigue

13th Global Fraud Survey

Overcoming compliance fatigue

Reinforcing the commitment to ethical growth

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Our 13th Global Fraud Survey presents some concerning trends. While robust regulatory enforcement is leading to record fines and companies are facing emerging threats such as cybercrime, management is balancing the need for growth with the necessity of keeping their companies out of trouble.

As the survey results highlight however, there is reason to be concerned about the integrity of some in the C-suite, just as corporate compliance efforts to effectively manage risk may be losing momentum. Both developments place significant additional pressure on boards of directors.

Key global findings include:

  • Nearly 40% of executives consider bribery and corruption widespread in their country
  • Emerging risks are not being taken seriously enough, nearly half of respondents consider cybercrime a low risk
  • C-suite integrity perceived to be in doubt with significant minority of respondents willing to justify financial statement fraud
  • With management struggling to respond to long-standing and emerging fraud risks, boards put under more pressure

Traditional fraud risks have not diminished

Our survey shows that the risks businesses are facing are not receding. The incidence of fraud and reported levels of corruption are not declining with more than 1 in 10 executives surveyed globally reporting their company experienced a significant fraud in the past two years. In fact, the level of fraud reported by respondents has remained largely unchanged over the past six years: from 13% in 2008 to 12% in 2014. Australia’s incidence rate stands at 13%.

Fraud — a challenge for all economies

EY - Fraud — a challenge for all economies

Challenges in addressing new risks

Markets are never static. New risks constantly emerge and the matters that regulators and the public consider inappropriate or fraudulent are evolving. For example, in certain markets companies are facing investigation of their recruiting practices (the so-called ‘princeling’ cases), where it is alleged that children of influential figures were hired to win or retain business. In performing its oversight role, the board must challenge the business on whether the right compliance risks have been identified and are being effectively managed.

52% of Australian respondents – 48% globally – considered cybercrime to represent a very or fairly low risk to their business.

We found that one particular emerging risk – cybercrime – did not appear to be as high up senior management’s agenda as may be expected.

Risks old and new require a dynamic response

Are compliance efforts running out of steam?

The survey results provide a warning to boards of directors that compliance efforts may be losing momentum. Despite the aggressive enforcement environment, our research suggests that the percentage of companies globally that have anti-bribery/anti-corruption (ABAC) policies has increased by only 1% over the past two years and a persistent minority has yet to take even the basic steps toward an effective compliance program. In Australia we found:

  • There has been a reduction in the number of respondents who have a ABAC policy in place – from 100% to 89%
  • Over 53% of respondents have not been trained on ABAC
  • Over 48% of respondents (C-suite) have not participated in an ABAC risk assessment in the past two years

Learn from those most exposed — and focus resources

Compliance efforts need to focus on teams most exposed to risk. Our survey results show this is not always the case.

Bribery training vs. incidence of bribery

EY - Bribery training vs. incidence of bribery

With more focus on driving revenues from less mature markets, the challenges for companies are getting more complex at the very time that regulators are working together across borders like never before to hold companies and their executives to account. The time is now to reinforce the commitment to driving ethical growth.

Discover more by accessing the 13th Global Fraud Survey Report Series Overcoming compliance fatigue: reinforcing the commitment to ethical growth or by clicking the pdf link on the right of the page.

Fraud — a challenge for all economies

EY - Fraud — a challenge for all economies
Q: Has your organization experienced a significant fraud in the last two years?

Base: All respondents (2,719)
GDP per capita figures are 2012 GDP per capita (current US$) from World Bank World Development Indicators, as updated on May 6, 2014


Bribery training vs. incidence of bribery

EY - Bribery training vs. incidence of bribery

Q: Have you attended ABAC training?
Q: Have you ever been asked to do any of the following? Pay a bribe in a business situation

Base: All respondents (2,719); Western Europe (852); Eastern Europe (608); Middle East, India and Africa (403); North America (100); South America (252); Far East Asia (403); Oceania (51); Japan (50)