Baltic Companies Less Likely to Fight Fraud, Survey Finds



A global study conducted by Ernst & Young has found that corruption and illegal practices are rising throughout the world, and the Baltics are no exception.

According to the 2012 Global Fraud Survey, 4 percent of Baltic executives would be prepared to offer bribes to save or provide a stimulus for their business, and 20 percent would make non-monetary gifts. The latter figure is eight percentage points more than it was last year.

Only eight percent of respondents in the Baltics consider it necessary to adopt measures to hedge the risk of fraud.

Information was not available specifically for Estonia.

Ernst & Young Baltic AS management board member Ivar Kiigemägi said financial instability and corporate goals had made fraud and corruption everyday phenomena.

The survey found that four percent of the 400 financial officers surveyed worldwide would be ready to falsify corporate financial indicators in some way.

Kiigemägi said that though the figure seemed low, it was enough to pose a threat to the economy as five percent of a company's revenue is lost to fraud.

Failure to identify risks of fraud and corruption perpetrated by third parties was another problem found around the globe. The most common methods of combating it are background checks (56 percent), approved supplier database (59 percent) and a background analysis of corporate ownership and executives (50 percent). Only one-third of companies in the Baltics employ such tools.

A total of 39 percent of worldwide respondents said they thought corruption and fraud had become ordinary phenomena and a total of 15 percent of executives were prepared to offer bribes to increase their profits.

Kristopher Rikken