Fraud and corruption are rife in Asia-Pacific, according to research published today showing that half of companies’ anti-bribery and anti-corruption policies are failing in the region.
In the Asia-Pacific Fraud Survey Report from accountancy firm Ernst and Young, 48% of executives from large corporations in the region admitted that their companies’ policies do not work.
Of the 681 executives polled from eight countries across the region, 19% reported an increase in bribery and corruption.
Respondents said compliance and anti-fraud measures can be compromised in tough market conditions, with 27% of respondents admitting managers are likely to take short cuts to meet targets.
Well-trained local legal teams are better suited to dealing with problems than companies’ head offices, as a difference in jurisdiction to commonwealth countries can lead to confusion in interpreting rules, said the research.
John Smart, head of Ernst and Young’s UK fraud investigation & disputes services practice said organisations could be under a false impression that they are addressing fraud, bribery and corruption issues.
International companies with operations in the region could be exposed to significant regulatory risk, with the US Securities and Exchange Commission and Department of Justice remaining focused on corporate conduct in the Asia-Pacific region, he said.
‘Companies in Asia-Pacific need to do more when it comes to anti-bribery and anti-corruption particularly as many of these markets are expected to play a leading role in the global economy. These companies cannot afford to lag behind on this issue.’