MUSCAT, MAY 27 - Despite regulators and law enforcement agencies around the world imposing more than $11bn of financial penalties globally since 2012, corruption risks in the Middle East are still high, according to the 15th EY Global Fraud Survey. Forty-eight per cent of Middle East respondents cited fraud and corruption as the greatest risk to their company, followed by cyber-attacks (38 per cent). While 97 per cent of respondents agreed that it is important to demonstrate that their organisation operates with integrity, 39 per cent still think that offering cash payments can be justified if they help a business survive an economic downturn.
Charles de Chermont, EY MENA Fraud Investigation & Dispute Services Leader, says: “The findings show that there is often a lag between the introduction of stronger anti-corruption laws and a change in behaviour. While new laws and regulations have been introduced and enforcement intensified, non-compliant behaviour still remains, though the Middle East is certainly tackling the issue.”
This year’s survey found that 42 per cent of executives surveyed in the Middle East believe that corrupt practices still occur widely in business.
“Businesses remain vulnerable to significant financial and reputational harm. Management teams must identify and address the root causes of such conduct in their organisation. Compliance programs need to keep pace with the impact of rapid technological advancements and the increasingly complex risk environment on business operations,” comments Charles.
The report finds that individuals shirk responsibility; when asked who is held accountable for ensuring employee integrity, 50 per cent of respondents believe that integrity is the primary responsibility of either management or the board, and only 14 per cent feel that individuals should take primary responsibility for their organisation behaving with integrity.
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