Companies in the Asia-Pacific region are exposed to greater fraud and corruption risks because of a disconnect between anti-graft measures and how they are applied, a survey by EY (formerly Ernst & Young) shows. Nearly half (48 per cent) of the executives polled for its first Asia-Pacific fraud survey, entitled Building a more Ethical Business Environment, said their companies' anti-bribery and anti-corruption policies are good in principle but do not work well in practice.

The survey, which covers Australia, China, Indonesia, Malaysia, New Zealand, Singapore, South Korea and Vietnam, shows how weak systems and controls are exposing companies in Asia-Pacific to significant risks as internal controls and compliance programmes are not implemented as thoroughly as they should be. The slower growth environment is putting management under pressure to take short cuts, and one in five respondents considers bribery and corruption to be widespread in their home countries.

"This research indicates fraud and corruption is on the radar for companies, however, when we compare the results with EY's last global fraud survey in 2012 (81 per cent) and our Europe, Middle East, India and Africa (57 per cent) survey published earlier this year, companies in Asia-Pacific are still lagging behind," said John Smart, head of EY's UK fraud investigation and dispute services practice.

Developing and enforcing laws against fraud, bribery and corruption have been a key priority of governments in the region in recent years, the report says, and in markets where enforcement of anti-bribery and anti-corruption laws is more rigorous, the risks are perceived to be reduced. “If anything the last few years have shown us that compliance is not something companies should only focus on during the good times,” said Smart.

“If companies in Asia-Pacific really want to look at ways they can reduce their exposure to fraud and corruption, they should be looking at it as a holistic issue and addressing it across all levels of the organisation.”