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Fraud Survey: Encuesta Global del Fraude de EY

Overcoming compliance fatigue: Reinforcing the commitment to ethical growth

13th Global Fraud Survey - findings for Spain

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Fraud Survey: Encuesta Global del Fraude de EY

  1. 1. Overcoming compliance fatigue Reinforcing the commitment to ethical growth 13th Global Fraud Survey - findings for Spain June 2014
  2. 2. Survey approach and participant profile ► Between November 2013 and February 2014, our researchers conducted 2,719 interviews with various executives in 59 countries and territories. ► Interviewees were selected from a sample of the largest companies in each country. Employees interviewed included industry leaders – chief executive officers (CEOs), chief financial officers (CFOs), chief compliance officers (CCOs), general counsel and heads of internal audit. Interviews were conducted on an anonymous basis in the local language by telephone or in person. Details of the full survey are shown below: ► 50 interviews were conducted in Spain ► Results are compared with findings for Western Europe*, developed markets*, emerging markets* and all respondents ► Please note that, due to rounding or the omission of percentages to allow better comparison, some figures may not sum to 100% Job title % of respondents CFO 28% Other finance 23% Head of internal audit 9% Other audit/risk 9% General counsel 7% CEO 6% Head of marketing/sales 4% CCO 3% Other 11% Revenue % of respondents More than US$5b 6% US$1b-US$5b 18% US$500m-US$0.99b 13% US$100m-US$499m 30% US$99m or less 31% Above US$1b 24% Below US$1b 73% Page 1 13th Global Fraud Survey * Details of countries categorized as Western Europe, developed markets and emerging markets can be found in the appendix. June 2014
  3. 3. Western Europe Developed markets Emerging markets All respondents 28 30 28 29 10 11 17 14 8 7 16 13 3 4 8 6 35 38 45 42 Figures 1,5&10: Unethical behavior persists Q. Which, if any, of the following do you feel can be justified if they help a business survive an economic downturn? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and none of the above have been omitted to allow better comparison between responses given 18 12 10 8 36 Offering entertainment to win/retain business Personal gifts to win/retain business Cash payments to win/retain business Misstating company’s financial performance At least one of these can be justified Page 2 June 2014 13th Global Fraud Survey % Agree % Agree Spain
  4. 4. Challenges in addressing new risks - cybercrime
  5. 5. 26 35 34 28 31 14 13 14 20 17 42 36 33 28 30 16 14 17 20 19 How much of a risk would you say cybercrime poses to organizations like yours? Figure 2: Cybercrime - a real and growing risk Q. How much of a risk would you say cybercrime poses to organizations like yours? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and refused have been omitted to allow better comparison between responses given % Very/fairly high risk 58 50 50 48 49 Page 4 June 2014 13th Global Fraud Survey Spain Western Europe Developed markets Emerging markets All respondents % Very low risk % Fairly low risk % Fairly high risk % Very high risk
  6. 6. 4 16 40 38 58 Foreign nation states Organized crime Employees or contractors Competitors Hackers or hacktivists Figure 3: Threats from within and without Q. Thinking of the following sources of cybercrime, which one or two of the following, if any, concerns you the most? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and none of the above have been omitted to allow better comparison between responses given Western Europe Developed markets Emerging markets All respondents 7 8 5 6 27 25 25 25 33 34 33 33 33 31 35 34 47 50 47 48 % Agree Page 5 June 2014 13th Global Fraud Survey % Agree Spain
  7. 7. Fraud - long-standing risks present challenges too
  8. 8. Page 7 13th Global Fraud Survey Figure 4: Fraud – a challenge for all economies Q. Has your organization experienced a significant fraud in the last two years? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) 6 12 12 11 12 % Yes Spain Western Europe Developed markets Emerging markets All respondents Has your organization experienced a significant fraud in the last two years? June 2014
  9. 9. Western Europe Developed markets Emerging markets All respondents 28 28 37 33 12 11 17 14 9 9 13 11 7 7 10 8 56 57 45 50 42 41 52 47 Figure 6: Bending the rules or breaking the law? Q. Given the pressure that often exists to meet financial targets, which, if any, of the following activities do you feel can be justified to meet those targets? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and refused have been omitted to allow better comparison between responses given 12 12 4 4 72 28 More flexible product return policies Change assumptions determining valuations/reserves Extend monthly reporting period Backdate a contract None of these At least one of these Page 8 June 2014 13th Global Fraud Survey % Agree % Agree Spain
  10. 10. Bribery and corruption - are compliance efforts running out of steam?
  11. 11. Figure 8: Bribery and corruption unchanged Bribery/corrupt practices happen widely in business in this country Q. For each of the following, can you tell me whether you think it applies, or does not apply, to your country or industry or whether you don’t know? Bribery/corrupt practices happen widely in business in this country Base: Spain 2014 (50), 2012 (50); Western Europe 2014 (636), 2012 (652); developed markets 2014 (869), 2012 (877); emerging markets 2014 (1159), 2012 (931); all respondents 2014 (2028), 2012 (1808) % don't know has been omitted to allow better comparison between responses given Note that the results shown are adjusted to reflect the profile of respondents from the current survey compared to our previous survey (like for like). % Does not apply % Applies 28 34 20 22 19 19 54 56 39 38 56 60 74 71 75 72 34 33 52 52 Spain 2014 Spain 2012 Western Europe 2014 Western Europe 2012 Developed markets 2014 Developed markets 2012 Emerging markets 2014 Emerging markets 2012 All respondents 2014 All respondents 2012 Page 10 June 2014 13th Global Fraud Survey
  12. 12. Figure 9: Cheques and balances - asked to pay a bribe in a business situation Q. Have you ever been asked to do any of the following? Pay a bribe in a business situation Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and refused have been omitted to allow better comparison between responses given Have you ever been asked to pay a bribe in a business situation? Page 11 June 2014 13th Global Fraud Survey 0 3 3 10 7 100 96 96 89 92 Spain Western Europe Developed markets Emerging markets All respondents % No % Yes
  13. 13. Page 12 Figure 9: Cheques and balances - asked to make a charitable contribution Q. Have you ever been asked to do any of the following? Make a charitable contribution by a customer or client Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and refused have been omitted to allow better comparison between responses given Have you ever been asked to make a charitable contribution by a customer or client? 4 14 15 23 20 96 84 83 75 78 Spain Western Europe Developed markets Emerging markets All respondents % No % Yes June 2014 13th Global Fraud Survey
  14. 14. Figure 9: Cheques and balances - asked to pre-or post-date a contract Q. Have you ever been asked pre- or post-date a contract? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and refused have been omitted to allow better comparison between responses given Have you ever been asked to pre- or post-date a contract? Page 13 June 2014 13th Global Fraud Survey 16 20 17 17 17 84 79 81 81 81 Spain Western Europe Developed markets Emerging markets All respondents % No % Yes
  15. 15. Figure 11: Has compliance stalled? Anti-bribery/anti-corruption policy 54 74 87 84 87 86 78 76 82 81 36 22 11 14 11 12 18 21 15 17 We have an anti-bribery/anti-corruption policy and code of conduct Spain 2014 Spain 2012 Western Europe 2014 Western Europe 2012 Developed markets 2014 Developed markets 2012 Emerging markets 2014 Emerging markets 2012 All respondents 2014 All respondents 2012 Q. For each of the following, please tell me whether it applies, or does not apply, to your organization, or whether you don’t know? Base: Spain 2014 (50), 2012 (50); Western Europe 2014 (636), 2012 (652); developed markets 2014 (869), 2012 (877); emerging markets 2014 (1159), 2012 (931); all respondents 2014 (2028), 2012 (1808) % don't know has been omitted to allow better comparison between responses given Note that the results shown are adjusted to reflect the profile of respondents from the current survey compared to our previous survey (like for like). Whereas, the country breakdown on the following slide reflects the unadjusted results of all respondents. % Does not apply % Applies Page 14 June 2014 13th Global Fraud Survey
  16. 16. Figure 11: Has compliance stalled? Senior management commitment Senior management has strongly communicated its commitment to our anti-bribery/anti-corruption policies 70 86 84 84 85 86 82 82 83 84 22 10 13 14 13 12 13 15 13 14 Spain 2014 Spain 2012 Western Europe 2014 Western Europe 2012 Developed markets 2014 Developed markets 2012 Emerging markets 2014 Emerging markets 2012 All respondents 2014 All respondents 2012 % Does not apply % Applies Page 15 June 2014 13th Global Fraud Survey Q. For each of the following, please tell me whether it applies, or does not apply, to your organization, or whether you don’t know? Base: Spain 2014 (50), 2012 (50); Western Europe 2014 (636), 2012 (652); developed markets 2014 (869), 2012 (877); emerging markets 2014 (1159), 2012 (931); all respondents 2014 (2028), 2012 (1808) % don't know has been omitted to allow better comparison between responses given Note that the results shown are adjusted to reflect the profile of respondents from the current survey compared to our previous survey (like for like). Whereas, the country breakdown on the following slide reflects the unadjusted results of all respondents.
  17. 17. Figure 11: Has compliance stalled? Clear penalties There are clear penalties for breaking our anti-bribery/anti-corruption policies 56 68 73 72 76 75 71 68 73 71 38 28 23 23 21 20 21 27 21 24 Spain 2014 Spain 2012 Western Europe 2014 Western Europe 2012 Developed markets 2014 Developed markets 2012 Emerging markets 2014 Emerging markets 2012 All respondents 2014 All respondents 2012 % Does not apply % Applies Page 16 June 2014 13th Global Fraud Survey Q. For each of the following, please tell me whether it applies, or does not apply, to your organization, or whether you don’t know? Base: Spain 2014 (50), 2012 (50); Western Europe 2014 (636), 2012 (652); developed markets 2014 (869), 2012 (877); emerging markets 2014 (1159), 2012 (931); all respondents 2014 (2028), 2012 (1808) % don't know has been omitted to allow better comparison between responses given Note that the results shown are adjusted to reflect the profile of respondents from the current survey compared to our previous survey (like for like). Whereas, the country breakdown on the following slide reflects the unadjusted results of all respondents.
  18. 18. Page 17 Figure 11: Has compliance stalled? People penalized for breaching policies People have been penalized for breaching our anti-bribery/anti-corruption policies % Does not apply % Applies June 2014 20 50 31 39 30 39 40 49 35 44 68 38 55 50 54 49 46 41 50 45 Spain 2014 Spain 2012 Western Europe 2014 Western Europe 2012 Developed markets 2014 Developed markets 2012 Emerging markets 2014 Emerging markets 2012 All respondents 2014 All respondents 2012 13th Global Fraud Survey Q. For each of the following, please tell me whether it applies, or does not apply, to your organization, or whether you don’t know? Base: Spain 2014 (50), 2012 (50); Western Europe 2014 (636), 2012 (652); developed markets 2014 (869), 2012 (877); emerging markets 2014 (1159), 2012 (931); all respondents 2014 (2028), 2012 (1808) % don't know has been omitted to allow better comparison between responses given Note that the results shown are adjusted to reflect the profile of respondents from the current survey compared to our previous survey (like for like). Whereas, the country breakdown on the following slide reflects the unadjusted results of all respondents.
  19. 19. Figure 12: Demonstrating commitment, or not? Q. Have you attended anti-bribery/anti-corruption training? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know has been omitted to allow better comparison between responses given Have you attended anti-bribery/anti-corruption training? 38 59 58 40 47 62 41 42 59 52 Spain Western Europe Developed markets Emerging markets All respondents %No %Yes Page 18 June 2014 13th Global Fraud Survey
  20. 20. Figure 13: Risk assessments - reflecting the breadth of experience? Q. In the past two years, which, if any, of the following has your company asked you to participate in? An anti-bribery/anti-corruption risk assessment Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know has been omitted to allow better comparison between responses given In the past two years, has your company asked you to participate in an anti-bribery/anti-corruption risk assessment 32 42 41 31 35 68 57 57 65 62 Spain Western Europe Developed markets Emerging markets All respondents Page 19 June 2014 13th Global Fraud Survey %No %Yes
  21. 21. Risks old and new require a dynamic response
  22. 22. Figure 15: Perceptions of bribery/corrupt practices in this country Bribery/corrupt practices happen widely in business in this country Q. For each of the following, can you tell me whether you think it applies, or does not apply, to your country or industry or whether you don’t know? Bribery/corrupt practices happen widely in business in this country Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and refused have been omitted to allow better comparison between responses given % Does not apply % Applies 28 18 17 53 38 56 75 76 33 51 Spain Western Europe Developed markets Emerging markets All respondents Page 21 June 2014 13th Global Fraud Survey
  23. 23. Spain Western Europe Developed markets Emerging markets All respondents Page 22 Figure 15: Perceptions of bribery to win contracts in our sector Q. For each of the following, can you tell me whether you think it applies, or does not apply, to your country or industry, or whether you don’t know? In our sector, it is common practice to use bribery to win contracts Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and refused have been omitted to allow better comparison between responses given In our sector, it is common practice to use bribery to win contracts June 2014 13th Global Fraud Survey 6 5 5 18 12 92 92 92 74 82 % Does not apply % Applies
  24. 24. 38 59 58 40 47 0 3 3 10 7 Spain Western Europe Developed markets Emerging markets All respondents Figure 17: Bribery training vs. incidence of bribery Q. Have you attended anti-bribery/anti-corruption training? Q. Have you ever been asked to do any of the following? Pay a bribe in a business situation Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % Have attended anti-bribery/anti-corruption training % Have been asked to pay a bribe in a business situation Page 23 June 2014 13th Global Fraud Survey
  25. 25. 32 41 40 36 38 66 57 58 61 59 Figure 18: Focusing effort efficiently Q. In the past two years, which, if any, of the following has your company asked you to participate in? An interview by an internal auditor in relation to anti-bribery/anti-corruption compliance Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know and refused have been omitted to allow better comparison between responses given In the past two years, has your company asked you to participate in an interview by an internal auditor in relation to anti-bribery/anti-corruption compliance? Spain Western Europe Developed markets Emerging markets All respondents % No % Yes Page 24 June 2014 13th Global Fraud Survey
  26. 26. 20 53 58 46 51 72 44 39 49 45 Page 25 Figure 20: Whistleblowing - issues not being heard Q. Which of the following systems or processes does your organization have for monitoring compliance with anti-bribery and anti-corruption laws? Whistleblowing hotlines Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719) % don't know has been omitted to allow better comparison between responses given Whistleblowing hotlines Spain Western Europe Developed markets Emerging markets All respondents June 2014 13th Global Fraud Survey % No % Yes
  27. 27. Appendix
  28. 28. Page 27 Number of Spain interviews: role, sector, revenue June 2014 13th Global Fraud Survey Sector Automotive 1 Consumer products, retail, wholesale 16 Financial services 1 Government and public sector - Life sciences 2 Manufacturing and chemicals 7 Oil, gas, and mining 1 Power and utilities 3 Professional firms and services 8 Real estate 3 Technology, communications, and entertainment 3 Other transportation 2 Other sectors 3 Job function Finance 27 Internal Audit and Risk 11 Legal 2 Compliance 1 Other executives 9 Base: All respondents in Spain (50) Note: Revenue figures exclude respondents who said don’t know or refused Revenue More than $1 billion 10 $500 million to $1 billion - Less than $500 million 40
  29. 29. Profile of research sample ► Western Europe results are based on 852 interviews across 17 countries – Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the UK. ► Developed market results are based on 1,103 interviews across 23 countries – Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, UK and US. ► Emerging market results are based on 1,616 interviews across 36 countries and territories – Argentina, Brazil, Chile, China, Colombia, Croatia, Czech Republic, Egypt, Estonia, Hong Kong SAR, Hungary, India, Indonesia, Israel, Jordan, Kenya, Latvia, Lithuania, Malaysia, Mexico, Namibia, Nigeria, Philippines, Poland, Romania, Russia, Saudi Arabia, Serbia, Slovakia, Slovenia, South Africa, South Korea, Turkey, UAE, Ukraine and Vietnam. ► New Zealand’s survey results are included in the Oceania regional figures but due to the low base size no country level figures are shown. ► Baltic States include: Estonia, Latvia and Lithuania ► Middle East includes: Jordan and UAE Page 28 June 2014 13th Global Fraud Survey
  30. 30. EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.. © 2014 EYGM Limited. All Rights Reserved. ED None In line with EY’s commitment to minimize its impact on the environment, this document has been printed on paper with a high recycled content. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com/fids

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