One in 10 CEOs believe it’s justifiable to cook the books to survive economic downturn

One in 10 chief executives believe it’s acceptable to cook the books in order to help a business survive the economic downturn, a report from Ernst and Young has found.

In its 13th Global Fraud Survey, EY interviewed 2,700 executives across 59 countries, including Ireland.

Worryingly, 11 per cent of CEOs considered giving inaccurate financial performance as justifiable to help a business survive an economic downturn. However, in Ireland, this figure was lower at 4 per cent.

High stakes

“Given the risk of management overriding financial controls, the implications for boards from these findings about C-suite integrity are serious,” said

David Stulb

, global leader of EY’s Fraud Investigation and Dispute Services (FIDS) practice.

With regulators putting more resources towards prosecuting financial-statement fraud, and often cooperating with prosecutors from other jurisdictions, he said stakes have never been higher.

Fifty-four percent of respondents in emerging markets said bribery and corruption happen widely in these territories, compared to 16 per cent of respondents in Ireland.

Bribery

The results show 10 per cent of emerging market respondents have been asked to pay a bribe, compared to 3 per cent in developed markets. Twenty-one per cent of CEOs said that they had been approached to pay a bribe

.

When asked what is acceptable to help a business survive, 39 per cent of Irish respondents said they are willing to offer corporate entertainment.

The survey found 57 per cent of Irish respondents consider themselves at high risk of cyber crime.

Only 24 per cent of Irish respondents recognised the potential threat posed by employees and contractors, compared to the global average of 33 per cent.