Broadening Your Perspective 7-4 (Essay) The international accounting firm Ernst

Question

Broadening Your Perspective 7-4 (Essay)

The international accounting firm Ernst & Young performed a global survey on fraud. The results of that survey are summarized in a report titled “Driving Ethical Growth—New Markets, New Challenges” (Ernst & Young, 11th Global Fraud Survey). You can find this report by doing an Internet search on the title, or go to http://www.ey.com/Publication/vwLUAssets/Driving_ ethical_growth_-_new_markets,_new_challenges _11th_Global_Fraud_Survey/$FILE/EY_11th_Global_Fraud_Survey.pdf.

Read the Executive Summary section, and then skim the remainder of the report to answer the following questions.

What was the global percentage of companies that experienced fraud during the period covered by the survey, and what region of the world had the highest rate?

What percentage of survey respondents performed a fraud risk assessment in the six months prior to the survey? What percentage of survey respondents have never performed a fraud risk assessment?

What percentage of respondents thought members of the board of directors were either “very concerned” or “fairly concerned” about board members’ personal legal liability resulting from fraud at their companies?

What are the top three issues of concern to compliance officers according to the survey?

Explanation / Answer

1. The Global percentage of companies that experienced fraud during the period covered during the survey was @ 16%. Western Europe had the highest rate @ 21%.            2. 44% of the respondents performed a fraud risk assesment in the six months prior to the survey and 15% of the survey respondents had never performed a fraud risk assesment.      3. 76% (43 + 33) of the respondents thought members of the board of directors were either "very concerned" - 43% or "fairly concerned" - 33% about board members personal liability resulting from fraud at their companies.    The top three issues of concern to complaince officers are as follows: i. demonstrating the value of complinace to the wider organisation. ii. Gathering good quality consistent management information on compliance performance. iii. obtaining the resources to enusre that the compliance function can do its job effectively.

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