PRESSURE to deliver growth despite economic constraints and pay cuts is driving UK employees to commit fraud, with new anti-bribery laws doing little to put them off, according to research released today.
Seven per cent of UK directors and managers surveyed by accountancy firm Ernst & Young were aware of financial manipulation in their own company over the last 12 months, while a third said that bribery and corruption are widespread in the UK.
The most common fraud that respondents flagged up was revenues being recorded early to meet short-term financial targets, with nine per cent of those surveyed admitting it was a common occurrence. A further nine per cent said they were aware of customers being sold unnecessary products to hit sales targets, while seven per cent said costs were sometimes under-reported to shore up balance sheets.
The findings came as three-quarters of directors and managers said they felt under pressure to hit targets, and 71 per cent of workers admitted they had been hit by pay cuts, salary freezes, lower bonuses or pay rises below the rate of inflation.
Recent changes to the law – including 2011’s introduction of the Bribery Act – seem to have had little effect.
Some 19 per cent of respondents said they felt cash payments were justified to win or retain business, while 17 per cent were unaware of their firm’s compliance programmes.
“Many incorrectly assume that the mere existence of an anti-bribery programme is sufficient to mitigate their risk,” said Ernst & Young’s John Smart. “Companies must ensure the programme is communicated effectively ... and employees are trained adequately.”