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Wednesday, June 11, 2014
Fraud Bribery And Corruption
Fraud, bribery, corruption remain key challenges for India Inc: Ernst & Young-Financial Express
Fraud, bribery and corruption remain key challenges for Indian Inc even as majority of senior executives surveyed justified 'unfair actions' undertaken to tackle the economic downturn, says a report.
According to Ernst & Young's global fraud survey, 71 per cent of senior executives surveyed in India consider fraud, bribery and corruption as significant concerns for corporates.
The survey revealed that unethical behaviour still persists, with a majority of respondents justifying unfair actions undertaken to survive the economic downturn.
"Personal gifts, cash payments and offering entertainment to win or retain the business, and mis-stating the company's performance has emerged as consistent problems in the corporate environment," the report noted.
The survey was conducted among over 50 CEOs and senior executives in the country across functions such as finance, internal audit and sales among others.
As per the survey 55 per cent of respondents are more concerned about cybercrime perpetrated by employees or contractors as compared to hackers.
"The market sentiment continues to be challenged by the ever growing risks around fraud, bribery and corruption. Over the last few years, corporate India has seen compliance levels stall as management has focused on dealing with economic uncertainties and changes in the Indian regulatory landscape," E&Y India Leader for fraud investigation and dispute services Arpinder Singh said.
In this increasingly competitive market, most firms are under intense scrutiny to perform better than expected.
Given the pressure that exists to meet financial targets, 80 per cent of the senior executives surveyed considers that having more flexible product return policies, changing assumptions to determine valuations or reserves, backdating contract can be deemed as acceptable reasons to achieve those targets. Indian companies seem to be fatigued in their compliance efforts as only 71 per cent of respondents said that senior management has strongly communicated its commitment to anti-corruption policies. This is low compared to last survey, when the figure stood at 88 per cent.
Moreover, only 50 per cent of respondents said that there are clear penalties for breaking anti-corruption policies - this is again significantly lower compared to last time (72 per cent).
Besides, the trend of conducting anti-corruption trainings appears more in principle than actual adoption as only 29 per cent of respondents have attended such training programme.
Additionally, 47 per cent people surveyed said that their companies have whistleblowing hotlines.