By Peter Egwuatu
Ernst & Young, EY has observed that data issues are creating complexity for cyber threat management in companies. This was revealed at the EY’s 14th Global Fraud Survey 2016: Corporate misconduct.
The survey stated that individual consequences find a worldwide clamour for enhanced transparency at a time of increased geopolitical tensions and heightened volatility in financial markets.
According to EY’s survey “The escalating threats of cybercrime, terrorist financing and, more recently, the revelations regarding widespread possible misuse of offshore jurisdictions, have increased pressure on governments to act and companies to identify and mitigate fraud, bribery and corruption issues.”
Conducted between October 2015 and January 2016, the survey of nearly 3,000 senior business leaders from 62 countries and territories (including Nigeria) highlights overwhelming corporate support for enhanced beneficial ownership transparency, with 91 per cent of executives recognising the importance of establishing the ultimate beneficial ownership of entities with which they do business.
David Stulb, EY Global Leader of Fraud Investigation & Dispute Services, said “With the continuing anti-corruption enforcement focus on third-party conduct, and the recent revelations on the possible misuse of offshore financial structures, business leaders are right to be focused on securing a deeper understanding of their clients, partners and suppliers. Enhanced transparency is clearly a focus of broad public interest.”
Increased transparency is, however, only one facet of the solution to a problem that shows no sign of abating. In total, 39 per cent of respondents believe that bribery and corrupt practices happen widely in their country, little changed from 38 per cent in 2014 and 38 per cent in 2012.
In a question introduced in this year’s survey, 32% of respondents report that they have had personal the survey noted that regulators recognise the threat that bribery and corruption pose to a financial system already under stress and are increasingly cooperating across borders to hold individuals accountable for illegal acts. Such enforcement efforts appear to be heavily supported by survey respondents, with 83 per cent agreeing that prosecuting individuals will help deter future fraud, bribery and corruption. 98 per cent of the respondents in Nigeria agree to this view.
However, with 42 per cent of respondents admitting that they could justify unethical behaviour to meet financial targets, and 16% of finance team members below the CFO ready to justify making a cash payment to win or retain business, those executives responsible for ethics and compliance appear to be facing a significant challenge if they are to keep their organisations clear from the scrutiny of prosecutors.
The survey also identified a perception in emerging markets (including Nigeria) that individuals responsible for corruption are not being held to account, with 70, 62% of respondents in Brazil Nigeria and 56% in both Africa and Eastern Europe believing that although governments are willing to prosecute, they are not effective in securing convictions.