UK Bribery Act: having little effect
Despite the UK Bribery Act having come into force less than a year ago, only 28 per cent of UK companies responding to Ernst & Young’s Global Fraud survey received regular external reviews from law firms or other professional services consultants.
Law firm reviews
The results put the UK slightly behind the global average, which shows that around one in three companies employs regular law firm reviews to ensure it is adhering to anti-corruption rules.
However, the survey found that other techniques remain popular, for example, regular external and internal audits, whistleblowing hotlines and technology systems were still ranked highly by the 1,700 executives questioned, which included chief financial officers and heads of legal, compliance and internal audit, spanning 43 countries.
Partner John Smart, head of Ernst & Young’s fraud investigation and dispute service, commented on the results: ‘The combination of legal expertise alongside specialists who understand financial controls has been a crucial trend in the most successful anti-bribery and corruption processes.’
Perhaps the most shocking research result is the finding that, despite the UK legislation – under which businesses may face criminal fines and executives can be imprisoned -- some 54 per cent of British executives would not rule out unscrupulous behaviour, such as misstating financial statements, or providing personal gifts or cash to secure business.
That worrying figure emphasised the importance of the role of chief financial officers, reported the researchers. According to Ernst & Young, CFOs are among the most influential executives reporting to the board on fraud, bribery and corruption issues.
‘The CFO’s influence within companies means they have a key role in preventing fraud, bribery or corruption and they need to redouble their efforts to set the right tone,’ argued Mr Smart. ‘They need to ensure that they have performed a thorough risk assessment around fraud, bribery and corruption, particularly in high risk markets.’