Ernst & Young's (E&Y's) latest survey (their 12th) is an excellent and essential read for all concerned with the risk of fraud. I especially like the separate sections for different regions.
One word of caution: the report doesn't quantify the potential impact of fraud or corruption — it only discusses the likelihood of such, and the presence (or otherwise) of the controls and environment necessary to combat it. See this earlier post for a review of the ACFE report on fraud, which does include estimates of fraud impact.
Here are some bits of interest:
On a global basis, 39% of respondents reported that bribery or corrupt practices occur frequently in their countries. The challenge is even greater in rapid-growth markets, where a majority of respondents believe these practices are common.
• Globally, 15% of respondents are prepared to make cash payments, versus 9% in our last survey
• 5% of respondents might misstate financial performance, versus 3% in our last survey
Given the lack of progress since our last report on this issue, it is clear that boards need better and not just more information. Some feel swamped by voluminous risk management and control information and need more tailored, responsive and focused reporting.
E&Y has a number of recommendations for improving controls and the overall environment — worth spending the time to read and discuss with the management team.
I welcome your views and comments.