Surprising and disappointing results came from Ernst & Young’s annual and recently conducted global fraud survey. It found that 15% of chief financial officers (CFOs) across the globe would pay bribes to keep business from going out the door. This is up from 9% the year before. Five percent also said they would be willing to misstate financial results on company reports in exchange for side money.
This Website Is For Financial Professionals Only
The fact that more CFOs are willing to do this during troubled economic times is not conducive to building trust among the investing public. Over the 43 countries interviewed, over 1700 executives are tired of having to deal with compliance requirements designed to reduce fraud.
often goes unaddressed despite messages from the C-suite that it will not be tolerated. Granted, many of the cases prosecuted in the US involve external third parties. The surprising factor is that companies hiring the third parties fail to do adequate due diligence and, therefore, end up sullying their reputations or becoming involved in legal proceedings.
The need for ethical practices from a code-of-honor perspective is not determined by the health of the economy or the capital markets. In fact, the health of the economy and the capital markets may be led by the level of fiduciary practice by those participating in it.