“Canadian executives stand out head and shoulders from the rest of the world.”
Those were the eye-catching remarks of Mike Savage, fraud, investigation and dispute services leader at Ernst & Young commenting on the company’s 2016 Fraud Survey.
According to the survey, just four per cent of Canadian executives would justify unethical behaviour during a global downturn – placing them well below the global average of 36 per cent. Indeed Canadians are also less willing to act unethically in an effort to meet financial targets – whether that included cash payments, misstating performance, personal gifts or entertainment. Indeed close to three quarters do not believe actions are justified in an effort to meet targets – well ahead of the “just over half” figure worldwide.
Despite the overwhelmingly positive report on Canadians in general, there were a few black marks. For example, even though they do not support backdating contracts, booking revenues prematurely or extending monthly reporting periods, some Canadians were open to changing assumptions to determine valuations or reserves, as well as more flexible product return policies. Indeed while Canada ranks well compared to other countries, around one third of the Canadians surveyed believe that corruption and bribery still takes place widely in Canadian business – a leap of 10 per cent compared to the previous year.
Commenting on the survey in a report at the Ernst & Young website, Mike Savage commented: “The escalating threats of cybercrime and terrorist financing have increased pressure on governments and companies to act. Regulators are increasingly focused on individual misconduct and that means Canadian boards should ensure they’re doing enough to protect their businesses. Otherwise, they may be personally responsible for misconduct under their watch.”
According to the survey, 92 per cent of Canadians believe prosecuting individuals could help deter bribery, fraud and corruption: yet one third believe the government is not effective in securing convictions. There were also calls to introduce an effective whistleblowing service.
Where do you stand on the issue of fraud, corruption and bribery in Canadian business? Do you think they are a major problem in the country? Leave a comment below with your thoughts.