When Governance means “nothing”
You want to invest in a company – the first thing to examine is the financial records of the company. Just how solvent is the company? What does the future hold
But what if these records are false – it would appear a lot of them are. A fraud survey published by Ernst and Young indicated the demand for growth has led to “cooked books”.
The survey indicated one in five of nearly 3,500 staff from 36 countries in Europe, the Middle East, Africa and India had seen “financial manipulation” in the past 12 months.
It gets worse with 42% of Board Directors and top managers indicating they knew of “some type of irregular financial reporting”.
More than 50% of the sales staff surveyed did not consider anti-corruption policies as “relevant”. More than 25% indicated it was alright to offer personal gifts or services to win accounts.
It would appear the concept of bribery of foreign officials is just smoke to be blown away if a deal can be made. It is acceptable to engage in corruption, cut costs, apply pressure on suppliers to take short cuts or just cook the books. This is all OK – as long as the company records look good.
I wonder what it is like in Australia? Are we just as complacent, just as corrupt? Maybe we need a similar survey here. Get in touch with us below to get sent a checklist survey to determine how at risk of fraud you are.