Business ethics are crumbling in Australia as economic growth slows

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Getting a deal across the line and massaging financial reports is becoming more important to many in corporate Australia than being ethical.

Employees at major companies believe bribery and corrupt activity has increased because of tough economic conditions and increased competition, according to the 2017 EY Asia-Pacific Fraud Survey.

Almost a third (32%) of Australian respondents to the EY survey say slow economic growth coupled with growing pressure to exceed the business bottom line is taking its toll on ethical conduct.

More than a quarter (27%) believe it is common practice in their industry or sector to use bribery to win contracts and 31% believe Australian companies often report financial performance as better than it is.

“What’s most concerning for Australian business is the overwhelming belief that achieving economic targets trumps the need for ethical behaviour,” says Rob Locke, EY’s Oceania managing partner, Fraud Investigation and Dispute Services.

The survey revealed that despite wanting to work for ethical organisations, 17% believe it is justified to deliberately misstate a company’s financial performance to meet financial targets.

Another 20% believe it is justified to amend financial reports to provide a more positive outlook on results.

“CEOs, boards and senior management not only play an integral role in setting compliance policies but have a responsibility to ensure the wider company is following them,” says Locke.

“With 43% of Australian respondents believing people with questionable ethical practices are seen to be promoted, Australian business leaders need to recognise that perception is reality when it comes to ethical conduct.”

The EY survey of 1,698 employees of multinational corporations and domestic companies was conducted between November 2016 and February 2017 in Australia, mainland China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.