UAE. EY’s Europe, Middle East, India and Africa (EMEIA) Fraud Survey, Fraud and corruption – the easy option for growth?, has found that many businesses still do not have the basic building blocks in place for effective compliance.
Only 52% of MENA respondents stated they had an anti-bribery or anti-corruption (ABAC) policy and code of conduct in place.
The survey, which polled 3,800 employees of large businesses in 38 countries (400 in MENA, including Saudi Arabia, UAE, Oman and Egypt), found that pressure on businesses to grow revenues, together with market uncertainty and geopolitical instability, is creating increased risk in expansion opportunities and day-to-day operations.
For example, 52% of MENA survey respondents report that management is under pressure to expand into higher risk markets, compared to 31% across the EMEIA survey sample.
Michael Adlem, MENA Leader of EY’s Fraud Investigation & Dispute Services (FIDS) practice, says: “The risks of fraud, bribery and corruption are not going away. Businesses remain under intense pressure to grow and that growth can be achieved while appropriately managing the risks of fraud and corruption. Effective compliance is not a barrier to growth; it is a requirement for sustained success.”
Culture of compliance needs to change
The survey also found that despite increasing international and regulatory pressure on business ethics and their connection to global and regional economic growth, 50% of MENA respondents justified financial statement misstatement if it helped the business survive.
“Changing the culture of compliance can take time, especially if companies have become accustomed to operating in the grey areas of business. Increased regulation and scrutiny will help to speed up this focus but there is still pressure to keep improving. Senior management need to continually assess the risks their businesses may be exposed to. These risks can be external, like cyber-attacks or money laundering, but also internal, including market manipulation or misreporting,” says Michael.
Bribery policies need to be welcomed – and tailored
The survey also highlighted that just over half of respondents across MENA believed senior management has communicated strongly its commitment to ABAC policies or outlined clear penalties for breaking defined policies. However, 67% of MENA respondents added that they believed offering personal gifts, entertainment or cash were justified if it helped a business survive.
“There is an urgent need at the board level to make compliance more of a focus. The survey points out that MENA businesses are still not protecting themselves enough and generally there is a long way to go in making compliance an integral part of operations. This shouldn’t be the case. To grow in a high-risk market, the right controls and processes need to be in place, independently tested and teams should be trained to make the correct choice,” says Stuart Jones, Jr., Executive Director, MENA FIDS, EY.
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
The MENA practice of EY has been operating in the region since 1923. For over 90 years, we have grown to over 5,000 people united across 20 offices and 15 countries, sharing the same values and an unwavering commitment to quality.
As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplishments over the years, reaffirming our position as the largest and most established professional services organization in the region.
For more information, please visit ey.com/mena
About EY’s Europe, Middle East, India and Africa Fraud Survey 2015, Fraud and corruption – the easy option for growth?
Between December 2014 and January 2015, our researcher — the global market research agency Ipsos —conducted 3,800 interviews with employees of large companies in 38 countries online or in person. Interviews were conducted on an anonymous basis using local language in all countries.
This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.
