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Under-pressure bosses 'may resort to fraud'

Posted by: Laurence Simons 13/05/13

When put under pressure, we sometimes resort to elaborate means in order to squirm our way out of the problems we've created. For most of us, this only means pretending that an imaginary burglar must have broken in and eaten all of the frozen chicken our flatmate was looking forward to, but when you're in charge of a multinational company your excuses can become more complicated.

According to the Global Fraud Survey by Ernst & Young, the economic crisis around the globe has seen a growing number of top-ranking executives alter their figures in a bid to look more successful.

One in five of almost 3,500 staff quizzed in 36 countries in Europe, the Middle East, Africa and India reported some degree of business corruption in their organisation over the last 12 months, reports Business Insider.

Furthermore, 42 per cent of board directors and top managers surveyed said they were aware of "some type of irregular financial reporting".

It beggars belief that in the wake of the various scandals seen in financial organisations across the world, practices that could lead to further problems are still widespread, but the irony is that the credit crunch has put even more pressure on businesses to achieve a degree of profitability - occasionally through underhand dealings.

In-house lawyers in emerging countries such as India may have the biggest problems on their hands, with over a third of respondents in the nation suggesting that it is justifiable to offer cash gifts (bribes, as they are sometimes called) to win or retain business. This is triple the number of people in Western Europe who considered bribery acceptable.

While general counsel cannot be expected to control every transaction, and rogue executives will continue to exist, one hopes that the recent shift in moving in-house lawyers to strategic, decision-making roles will help build a strong culture of compliance in global business.