Almost four in ten Irish companies would be prepared to take potentially unethical actions to help their business survive an economic downturn, according to a new survey.
Company executives in the Republic said such actions included using client entertainment (30 per cent), making cash payments (10 per cent), giving personal gifts (10 per cent), and misstating a company’s financial performance (4 per cent).
The Ernst and Young global fraud survey Corporate Misconduct: Individual Consequences, published on Thursday , was carried out among over 2,800 C-suite executives in 62 countries including Ireland.
Some 46 per cent of Irish business leaders identified other actions that could be justified to meet financial targets.
These actions included providing more flexible product return policies (44 per cent); extending monthly reporting periods (20 per cent); changing assumptions determining valuations or reserves (14 per cent); and backdating a contract (10 per cent).
Almost a quarter (22 per cent) of business leaders said loyalty to their colleagues or company would prevent them from reporting an incident of fraud, bribery or corruption.
The survey also revealed that 8 per cent of business leaders believe bribery and corrupt practices happen widely in business in Ireland, while none said it was a common practice in their sector.
Ernst and Young's Fraud Investigation and Dispute Services head Julie Fenton said the research shows "a clear disconnect" between the perception and reality of bribery and corruption in Irish business.
“Our findings show that when the pressure is on to pull through an economic downturn or meet financial targets, a high proportion of Irish executives would be prepared to let their ethics slide,” she said.
A significant proportion of Irish business leaders surveyed said they did not prioritise the identification of corruption red flags in their risk assessments.
Some 42 per cent included “country specific risks” while 36 per cent included “industry specific risks” in their forensic or anti-corruption due diligence.
Ms Fenton said it was “essential” businesses recognise the importance of conducting the appropriate due diligence to ensure their business can mitigate against corrupt behaviour.
“In today’s evolving business landscape, where companies experiencing growth are seeking opportunities to move into new markets, and high growth sectors such as life sciences continue to dominate, it is essential that leadership recognise the importance of conducting the appropriate due diligence to ensure their business can mitigate against corrupt behaviour, thus avoiding the associated business, financial and reputational risk,” she said.
