2013 EMEIA Fraud Survey

Unethical business practices: spotlight on fraud

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The pressure to deliver growth and strong financial performance in difficult conditions is evident. But are executives, managers and their teams willing to cut corners or even act illegally to meet increasingly aggressive targets?

Our results show that fraud or other unethical conduct is not just a hypothetical risk. A significant minority of respondents say that unethical conduct is occurring in their own businesses in an effort to meet short-term financial targets.

Our survey results show that financial performance within companies may be distorted:

  • One in five respondents have seen financial manipulation of some kind occurring in their own companies.
  • It is more pronounced in rapid-growth markets, where over a quarter of respondents are witnessing this behavior.
  • The most common examples reported relate to overstated sales and understated costs.
  • In the financial services sector — where regulatory action has been intense — 9% of respondents had seen revenues recorded before they should have been; 7% were aware of underreporting of costs; and 9% knew of customers being sold unnecessary products to meet short-term sales targets.

Is management aware and taking necessary action?

These results are concerning enough on their own, but our survey also shows that management is clearly aware of this issue.

Forty-two percent of directors and senior management are aware of some type of irregular financial reporting in their companies. Within the finance area, nearly a quarter of respondents are aware.

To understand whether these misstatements — identified by directors and senior management — were manifesting themselves in financial reporting, we asked whether financial performance was being consistently overstated by companies in their countries.

The results also serve as a warning for multinational companies with subsidiaries in, for example, India (where 54% think financial performance is often exaggerated), Russia (61%) or Nigeria (68%).

These businesses have good reason to look critically at what is being reported back to the center from other jurisdictions.


Base: All respondents (3,459); Developed (1,500); Rapid-growth (1,103); Board director/senior management (246); Other management (769); Other non-management employees (2,444)
The "Don't know" and "Not heard of any of the above" percentages have been omitted to allow better comparison between the given responses.


Base: All respondents 2013 (3,459); Developed (1,500); Rapid-growth (1,103); Austria (100); Greece (100); India (100); Kenya (100); Nigeria (103); Russia (100); Saudi Arabia (100); Spain (100)
The "Don't know" percentages have been omitted to allow better comparison between the responses given.