60pc too afraid to flag poor financial performance
Published 08/10/2015 | 02:30
Sixty percent of those questioned for a survey on fraud and corruption believe they can't report negative financial performance to head office management in an open and transparent manner.
And half said they believed corruption and bribery to be widespread in Ireland. The study by EY Ireland found that while only 1pc of respondents stated they would deliberately misstate their financial position, one third considered entering some form of arrangement with suppliers to present a better financial position, if justifiable.
Julie Fenton, partner and head of EY's fraud investigation and dispute services practice in Ireland, said the findings suggest businesses are not averse to take options that would give the impression of a healthier financial position.
"The picture painted by these statistics could lead to the conclusion that in Ireland, whilst no one would actively misstate their financial results where there is flexibility to present a better financial position through say delaying invoicing, they would take this option. This coupled with the pressure of feeling that bad news cannot be reported can lead to an environment where non-compliance is seen as an option," she said.
While the EY survey was carried out among 3,800 people across 38 countries, 100 were interviewed in each country. The report also stated that 35pc of Irish respondents, whose businesses have experienced growth in the last two years, stated that they rate their company's ethical standards when doing business as 'very good, indicating that compliance and growth can work together'.
However, 26pc of overall respondents consider some form of financial misstatement had occurred in their company in the last twelve months.
30pc of Irish respondents reported that their company does not have a whistle-blowing hotline, and of those that do have a hotline, only 28pc believed that management would follow up.