The Ernst & Young European Fraud Survey interviewed 2,246 employees of major companies in 22 countries across Europe. Half of those surveyed believe that, “one or more types of unethical business behaviour was acceptable”. For example, 25 per cent of European respondents thought it fine to give a cash bribe to win work.

Worryingly, 55 per cent of European respondents expect corporate fraud to increase over the next few years. An increase is expected because of, “changes that will be made to businesses in response to the economic downturn, reduced focus on anti-fraud, pressures to protect the future of the company and the pressure to keep bonuses and compensation greater.”

Dr. Michael Faske, Ernst & Young’s Fraud Investigation & Dispute Services Leader in Switzerland, said, “Geographic location or relative economic wealth makes little difference to expectations of increased fraud across Europe. This is a global recession and fraud is a global problem.”

Some 69% of European respondents reportedly had, “cause to doubt the integrity of their company’s management”. According to Dr. Faske, “the senior management of the population that we surveyed are more likely to condone bribery and financial statement fraud than those of junior rank. Indeed our interaction with regulators suggests that they are very conscious of the shortcomings in corporate governance and are positioning themselves for much more aggressive enforcement action.”

In addition to making recommendations to address increased fraud risks, the report concludes that: “by demonstrating their commitment to ethical business conduct, management will not only be protecting assets of the organization but positioning the company to seize opportunities in adversity.”

To read the report click here.