News Release

Fraud and corruption still pose a formidable risk to businesses: EY Global Fraud Survey 2018

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  • 40% of respondents in India stated bribery and corruption happens widely in business
  • 12% stated their company experienced a significant fraud in the last two years
  • 30% said that individuals have still not been penalized for breaching company policies

Mumbai, Monday, 25 April, 2018: Organizations’ exposure to fraud and corruption risks has increased tremendously in a technologically dominated world, said EY’s Global Fraud Survey 2018, Integrity in the spotlight – The future of compliance. The report highlighted that 40% of India respondents indicated widespread bribery and corruption in business. There is increasing justification of unethical behaviour at the workplace as well as gaps in integrity - 1 in 5 respondents in India said that offering cash payments can be justified, and 1 in 6 said bribery is commonly used to win contracts. However, India respondents also said that some of the key advantages of demonstrating integrity is successful business performance (80%) and positive customer perception (78%). This shows inconsistency between organizational intent and actual performance of employees.

Arpinder Singh, Partner and Head – India and Emerging Markets, Fraud Investigation & Dispute Services, EY said:

Macroeconomic developments, market pressures, new regulations, enforcement and digital disruption have led to a shift in India’s risk landscape. Fraud, bribery and corruption continue to escalate, turning exceedingly complex and ingrained within businesses. In such trying times, management needs to boost the integrity agenda, redefine compliance programs and adopt a technology-centric approach driven by data analytics to minimize ethical lapses, business losses and reputational damage.”

The survey conducted by EY’s Fraud Investigation & Dispute Services practice covers insights from business leaders on trends and challenges that organizations may face when fighting fraud and corruption in an era of technological advancement. The key findings include:

  • Managing fraud, bribery and corruption – a herculean task - The propensity of fraud and corrupt practices is rising globally despite enhanced enforcement standards, new laws and regulations being rolled out as well as innovative, data driven compliance programs.
    • 44% of India respondents said that atleast one of the practices such as offering cash, entertainment, personal gifts and misstating financial performance is acceptable for business survival
    • 12% stated their company experienced a significant fraud in the last two years
    • Global enforcement agencies and regulators have levied more than US$11 billion of financial penalties since 2012
  • Integrity as part of management agenda - Most companies are beefing up their anti-fraud and anti-corruption efforts through customized compliance and risk mitigation programs, whistle-blowing mechanisms and web-based trainings. This shows a contradiction with respect to employee behaviour as individual misconduct still prevails.
    • 34% of India respondents expressed that its HR’s and 26% said its management’s responsibility to ensure that employees behave with integrity
    • 74% said that their companies have clear penalties for breaching policies
    • 46% stated avoiding regulatory scrutiny and penalties as one of the important benefits demonstrating integrity
  • Will the sanctity of data be preserved effectively? - Data protection and data privacy issues have magnified substantially with improved global connectivity and accessibility. It is paramount to safeguard an organization’s mission critical assets against the complex vulnerabilities of a digital world.
    • Only 18% of India respondents were aware of EU’s General Data Protection Regulation (GDPR) that will make every entity accountable and responsible for EU citizens’ Personally Identifiable Information
    • Globally, awareness stood at 40%, which suggests a significant gap in awareness of GDPR for countries both inside and outside EU
    • 20% recognized cyber-attacks as one of the greatest risks to businesses

- Ends -

Notes to Editors

About EY

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

About the survey

Between October 2017 and January 2018, our researchers — the global market research agency Ipsos MORI —conducted 2,550 interviews in the local language with senior decision-makers in a sample of the largest companies in 55 countries and territories. The polling sample was designed to elicit the views of executives with responsibility for tackling fraud, mainly CFOs, CCOs, general counsel and heads of internal audit.

About EY’s Fraud Investigation & Dispute Services (FIDS) practice

Dealing with complex issues of fraud, regulatory compliance and business disputes can detract from efforts to succeed. Better management of fraud risk and compliance exposure is a critical business priority — no matter the industry sector. With over 4,500 fraud investigation and dispute professionals around the world, we assemble the right multidisciplinary and culturally aligned team to work with you and your legal advisors. We work to give you the benefit of our broad sector experience, our deep subject matter knowledge and the latest insights from our work worldwide.

Perceptions of respondents of bribery/corrupt practices happening widely in business in their country/region

The table below shows the percentage of survey respondents who perceive that bribery/corrupt practices occur widely in business in their own country/region. Results are based on a sample size of 50 for each country/region except where stated.

Question to respondents: Bribery/corrupt practices happen widely in business in your country/region?

Figures below relate to ‘yes’ responses

2018 Rank

Country/region

% 2018

% 2012

L4L Rank1

2012 Rank

1

Brazil

96

84

1

2

2

Colombia

94

92

2

1

3

Nigeria

90

72

3

7

4

Kenya

88

76

4

5

5

Peru

82

N/A

N/A

N/A

6

South Africa

80

64

5

14

7

Cyprus

80

N/A

N/A

N/A

8

Mexico

70

60

6

15

9

Ukraine*

70

84

7

3

10

Argentina

68

68

8

10

11

Italy

68

74

9

6

12

Hungary

66

58

10

17

13

Slovakia

66

N/A

N/A

N/A

14

Bulgaria

60

N/A

N/A

N/A

15

Czech Republic

56

80

11

4

16

Malaysia

56

44

12

20

17

Philippines

54

N/A

N/A

N/A

18

Greece

46

68

13

11

19

Portugal

46

N/A

N/A

N/A

20

Saudi Arabia

46

N/A

N/A

N/A

21

Israel*

44

N/A

N/A

N/A

22

Lithuania

44

N/A

N/A

N/A

23

Indonesia

42

72

14

8

24

India

40

70

15

9

25

Australia & New Zealand**

38

142

162

292

26

Middle East

38

44

17

21

27

Chile

34

24

18

25

28

Romania

34

30

19

24

29

UK

34

14

20

30

30

Turkey

32

52

21

18

31

Canada

30

14

22

31

32

Russia

28

48

23

19

33

Spain

22

34

24

23

34

Belgium

20

10

25

37

35

France

20

16

26

28

36

Poland

20

20

27

26

37

South Korea

18

N/A

N/A

N/A

38

Luxembourg

18

N/A

N/A

N/A

39

USA

18

14

28

32

40

China (mainland)

16

143

293

363

41

Hong Kong

14

42

Japan

12

14

30

33

43

Ireland

10

14

31

34

44

Norway

10

14

32

35

45

Singapore

10

4

33

39

46

Austria

6

20

34

27

47

Denmark

6

N/A

N/A

N/A

48

Netherlands

6

6

35

38

49

Taiwan

6

N/A

N/A

N/A

50

Finland

4

N/A

N/A

N/A

51

Sweden

4

4

36

40

52

Switzerland

2

0

37

42

53

Germany

2

2

38

41

Source: EY Global Fraud Survey 2018 Integrity in the spotlight – The future of compliance
Table shows percentage of respondents answering ”applies.”
1L4L = Like for Like – country/regions that were surveyed in both 2012 and 2018
2In 2012 only Australia was surveyed
3In 2012 China (mainland) and Hong Kong were reported together
*Ukraine and Israel 25 respondents
**Australia 40 respondents, New Zealand 10 respondents