Almost half of business leaders 'would adjust numbers to meet targets'

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By Andrew Harbison, CA Today

28 April 2016

Almost half of CFOs and other business leaders would be prepared to engage in at least one form of unethical behaviour to meet financial targets or safeguard a company’s economic survival, according to a new survey.

The EY Global Fraud Survey found that 42% of the 2,825 survey respondents would seek to justify unethical behaviour to meet financial targets.

In the UK alone, almost 40% of interviewees stated that they would be prepared to make some form of adjustment to the presentation of financial performance to meet targets or safeguard a company’s economic survival.

In contrast to these figures, the report found that 91% of respondents believe it is important to understand the ultimate beneficial ownership of the entities with which they do business.

The report pointed out that, although there has been significant regulatory activity to tackle fraud and corruption, not enough businesses are proactively implementing anti-corruption programs, or taking advantage of new technology.

The survey also suggested that businesses are underestimating the threat of cyber-crime, with only 41% of CFOs polled viewing it as a concern.

“There remains a worryingly high tolerance or misunderstanding of conduct that can be considered inappropriate — particularly among respondents from finance functions,” said David L. Stulb, global leader of fraud investigation and dispute services.

The perception that enforcement bodies are either unwilling or unable to secure prosecutions for fraud related offences was a significant theme in the EY report. In relation to the UK, it said this perception may be a result of a lack of media attention around prosecutions secured under the UK Bribery Act 2010.

The UK summary of the survey referred to “a number of milestone cases through the courts in the last 12 months” suggesting the Act “has teeth”.

ICAS recently launched The Power of One business ethics initiative to support CAs in ethical leadership. Anton Colella, ICAS CEO, called for a new era of personal responsibility across the business world and said there has never been a more important time to shift the focus back on to business ethics.

Speaking at the launch of The Power of One, Anton said: “Corporate failure often begins with personal failure. Our aim is to place personal ethical behaviour as the number one priority for individuals”.

He added: “It is often a very lonely place for an individual to stand up against unethical behaviour.  ‘The Power of One’ aims to show business men and women who meet unethical behaviour that they are not alone –  thousands of Chartered Accountants around the world stand behind them and indeed expect their colleagues to stand up and be counted. The power in this is enshrining the power of individuals to make a difference.”

CAs can access a range of new resource and support on ethics as part of The Power of One initiative.

The EY Global Fraud survey was conducted between October 2015 and January 2016, involving senior business leaders from 62 countries.


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