Fraud emerges as major concern of the recovery

Company boards are unprepared to deal with the risk of fraud as companies return to growth after the global financial crisis, according to a survey from Ernst & Young.

The Global Fraud Survey found that 76% of those questioned also felt increasingly concerned about their personal liabilities if their companies were hit by fraud, bribery or corruption scandal.

Ernst & Young’s head of fraud investigation in the UK, John Smart, said: "Increased enforcement against fraud, bribery and corruption is a priority in many major markets. Individual executives and directors will not be immune from prosecution.

"Indeed, the passage of the UK’s Bribery Act is the latest example of a more robust approach to punishing the unethical conduct of individuals and corporates, and one that may have extraterritorial application."

The survey sought the views of 1,400 CFOs and heads of legal, compliance and internal audit, in major companies in 36 countries across the world.

Western Europe saw a marked increase in the number of companies that had suffered a significant fraud case increased from 1-% to 21%. In Latin America the number is 21% while the Middle East and Africa are on 18%.

The report found that nearly one in ten UK companies, 8% had never prepared a fraud risk assessment of their companies.

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