Source: The Economic Times, May 24,2012
MUMBAI: Corporate India tops the global league when it comes to bribing and financial frauds, with 28 per cent of top executives being keen on making cash payments to win new businesses or retain existing clients, says a survey by leading global consultancy Ernst & Young (E&Y).
The top executives are also not bothered about the consequences of future prosecution for their fraudulent acts, as they are under tremendous board pressure to perform, says the survey.
The findings are interesting as they come at a time when India Inc as well as the public have been for long painting the entire political class "corrupt".
"An alarming 28 per cent of top executives from corporate India (against a global average of 15 per cent, which is up from 9 per cent in 2010) polled are willing to make cash payments to win or retain business," the survey says.
The survey findings add that "as much as 16 per cent of respondents from the country, against a global average of five per cent, feel that it is justified to mis-state financial performance to help their business survive."
Given the extensive media coverage, it is not surprising that fraud, bribery and corruption are seen as significant risks here, with 70 per cent of respondents (against global average of 39 per cent) opining that bribery and corruption are widespread in the country.
Releasing the survey finding, E&Y India partner and national director for fraud investigation & dispute services, Arpinder Singh said: "Although the country still remains a favoured investment destination, the survey reveals that the market still faces the challenge of compromised ethical behaviour justified by the offenders as survival in a highly competitive and fast growing market.
"As domestic enforcement activity is building strength, increased focus on mitigating frauds, bribery and corruption risk has been matched by growing regulatory activity, enhanced media activism and more severe penalties."
The survey further says as the market continues extensive use of cash to make payments, organisations must ensure that governance processes are embedded at the local level.
"With fraud, bribery and corruption risk so high on the domestic and international agenda, it is essential that companies with a presence in India actively address these risks," Singh said.
For a growing number of executives, the pressure to meet revenue growth targets is undermining their commitment to comply with policies and the law. The competitive landscape continues to be distorted by unethical conduct.
Over a third of the respondents believe corruption is widespread and this is perceived to be significantly higher in rapid-growth markets (in Brazil it is 84 per cent, in India 70 per cent, Indonesia 72 per cent).
Financial statement frauds remain an important risk across many jurisdictions. Indeed, 15 per cent of respondents in far-east Asia think that financial performance mis-statement can be justified.
MUMBAI: Corporate India tops the global league when it comes to bribing and financial frauds, with 28 per cent of top executives being keen on making cash payments to win new businesses or retain existing clients, says a survey by leading global consultancy Ernst & Young (E&Y).
The top executives are also not bothered about the consequences of future prosecution for their fraudulent acts, as they are under tremendous board pressure to perform, says the survey.
The findings are interesting as they come at a time when India Inc as well as the public have been for long painting the entire political class "corrupt".
"An alarming 28 per cent of top executives from corporate India (against a global average of 15 per cent, which is up from 9 per cent in 2010) polled are willing to make cash payments to win or retain business," the survey says.
The survey findings add that "as much as 16 per cent of respondents from the country, against a global average of five per cent, feel that it is justified to mis-state financial performance to help their business survive."
Given the extensive media coverage, it is not surprising that fraud, bribery and corruption are seen as significant risks here, with 70 per cent of respondents (against global average of 39 per cent) opining that bribery and corruption are widespread in the country.
Releasing the survey finding, E&Y India partner and national director for fraud investigation & dispute services, Arpinder Singh said: "Although the country still remains a favoured investment destination, the survey reveals that the market still faces the challenge of compromised ethical behaviour justified by the offenders as survival in a highly competitive and fast growing market.
"As domestic enforcement activity is building strength, increased focus on mitigating frauds, bribery and corruption risk has been matched by growing regulatory activity, enhanced media activism and more severe penalties."
The survey further says as the market continues extensive use of cash to make payments, organisations must ensure that governance processes are embedded at the local level.
"With fraud, bribery and corruption risk so high on the domestic and international agenda, it is essential that companies with a presence in India actively address these risks," Singh said.
For a growing number of executives, the pressure to meet revenue growth targets is undermining their commitment to comply with policies and the law. The competitive landscape continues to be distorted by unethical conduct.
Over a third of the respondents believe corruption is widespread and this is perceived to be significantly higher in rapid-growth markets (in Brazil it is 84 per cent, in India 70 per cent, Indonesia 72 per cent).
Financial statement frauds remain an important risk across many jurisdictions. Indeed, 15 per cent of respondents in far-east Asia think that financial performance mis-statement can be justified.
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