May 25th, 2012
08:03 AM GMT
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(CNN) – Despite the financial crisis and the implosion of businesses like Enron over shady business practices, senior executives are now more likely to pay bribes to win business, according to a survey by Ernst & Young.

Of the nearly 400 CFO’s polled from November to February, 15% would make cash payments to win or retain business – up from 9% two years ago.

Financial statement fraud remains a risk as well, with 5% of the respondents saying they are willing to misstate financial performance, up from 3 % in the last survey.

In the 12th Global Fraud Survey, more than 1,700 executives – including CFO’s and leaders in legal, compliance and internal auditors – across 43 countries were polled for their views on corruption.

Over a third of the respondents believe corruption occurs frequently in their country. Bribery or corrupt practices are believed to be even bigger in rapid-growth markets, survey respondents said. In Brazil, 84% of executives said corruption was widespread.

“Growth and ethical business conduct in today’s markets can appear to be competing priorities,” said David Stulb, Global Leader of Ernst & Young’s Fraud Investigation & Disputes Services practice, in a news release. “Our findings show that, as businesses continue to pursue opportunities in new markets, many executives are underestimating the risks.”

Entering a new market requires local contacts and third-party agents, which adds greater risk to violating corruption and bribery laws, the survey reports.

Regulations exist to counteract these challenges in growing markets, such as the UK Bribery Act or the U.S. Foreign Corrupt Practices Act (FCPA). In 2011, the majority of reported FCPA cases involved activities in Asia, Eastern Europe and Latin America, the survey says.

Bloomberg reports that in the U.S., companies since 2008 have been fined a total of $3.9 billion in 50 corporate foreign bribery cases.

However, Ernst & Young’s fraud survey said that companies lack effort to prevent bribery and corruption. Among the respondents, 81% said their company had anti corruption policies. But almost half said they do not believe people have been penalized for violations.

Forty two percent had not received any training on such policies, the survey said.

“For businesses to seize new opportunities, boards need to ensure that the right tone is set not just at the top, but at all levels and in all markets,” Stulb said in the news release.

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soundoff (8 Responses)
  1. government cheese

    I don't do these types of comment sections.

    May 25, 2012 at 10:03 am |
  2. Ken Young

    You have been doing it for years through lobbyists.
    Only you have a better name–Political contributions. It is no difference from bribery!

    May 25, 2012 at 12:36 pm |
  3. Mark Hefner

    I think this CNN report could have better pointed out the ethical and cultural differences that do exist between different western countries and other parts of the world. For example, in Asian countries, bribery or other questionable (by western standards) practices to win business is more of a norm than not. The CNN report seemed to skip over this very important aspect of the story. However, the actual Global Fraud Survey does point out these differences.

    Perhaps it's easier to touch the nerve of CNN readers if you only tell them what you think they want to hear. This is a very ethnocentric report by CNN. However, for CNN, this is normal.

    May 25, 2012 at 3:55 pm |
  4. Babak from Los Angeles

    Unfortunatly this is the norm. It has always been. I own a company and we serve the movie studios. I have the "take care" of everyone on the food chain from the guard gate all the way up to the president (or his decision maker).

    May 25, 2012 at 4:52 pm |
  5. Aristocles

    Why are we tolerating this? If the average citizen was asked if he would bribe a police officer to ignore a crime, it would be an outrage, and yet large segments of our society are seemingly content with the super-rich using their cash to break the law. 15% who say they are willing to do it is 15% too many.

    May 28, 2012 at 2:33 am |
  6. Aristocles

    It doesn't matter where it is done, bribery is wrong. Culture doesn't "make it right".

    May 28, 2012 at 2:34 am |
  7. icon downloads

    How so?


    September 23, 2012 at 12:12 am |
  8. icons downloads

    IOt is remarkable, very amusing message


    September 23, 2012 at 11:48 pm |

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