June 2008 VOL. 2

Did You Know?

Corruption is a growing problem for businesses and executives, but anti-corruption enforcement has become stronger around the globe over the past five years, according to Ernst & Young's 10th Annual Global Fraud Survey.

Ernst & Young interviewed nearly 1,200 executives across the world about their experiences of bribery and corruption. Their insights show that although companies are doing more to establish anti-corruption programs, their efforts are being undermined by a lack of knowledge about relevant legislation.

While one-third of business leaders say that corrupt business practices are becoming worse, nearly 70 percent of business leaders worldwide say enforcement has become stronger in their locality in the past five years, with individuals increasingly targeted for prosecution. Their perceptions are supported by the fact that regulatory authorities and law enforcement are cooperating more frequently.

The study also shows that although companies are recognizing the risks of corruption and are doing more to combat it. More than half of respondents are increasing training on the subject and 45 percent conduct some form of anti-corruption due diligence before making corporate acquisitions.

However, knowledge of relevant anti-corruption legislation remains patchy, undermining compliance efforts. Two-thirds of respondents claimed to know nothing about the Foreign Corrupt Practices Act (FCPA), even though it has become the de facto international standard and the basis for aggressive extraterritorial enforcement by US regulatory authorities.