Most mainland firms want graft tackled
Eighty per cent of mainland companies want greater regulatory supervision to tackle fraud and corruption compared to only 69 per cent globally, a survey by accounting firm Ernst & Young has found.
The survey, conducted between November and February, involved senior executives of 1,758 largest companies in 43 countries, including the US, China, India, Malaysia, Singapore and in Europe.
Chris Fordham, Asia-Pacific managing partner of fraud investigation and dispute services at Ernst & Young, said the result showed mainland companies had become more aware of the need to crack down on corruption to meet punitive international and domestic laws.
'Chinese authorities are taking local enforcement seriously,' Fordham said, adding 56 per cent of mainland respondents thought local regulators were willing to prosecute corruption, compared with 27 per cent globally.
The State Administration of Industry and Commerce has investigated more than 30,000 business-to-business corruption cases in the past five years, while mainland police have investigated 6,500 other cases.
'Asia as a whole, including the mainland, has stepped up efforts to crack down on bribery and corruption. This follows the trend in the US and Britain, where laws require companies to put in place measures to prevent corruption such as bribery,' Fordham said.
Some 39 per cent of the respondents globally said their countries had problems with corruption, compared with 36 per cent in Asia and 14 per cent on the mainland.
John Auerbach, managing director of assurance and fraud investigation and dispute services, said mainland companies were now more aware of the need to detect fraud-related risks than they were 10 years ago. Still, only 32 per cent of mainland companies conducted pre-acquisition due diligence, compared with 45 per cent elsewhere in Asia and 54 per cent globally.
Auerbach said this was because the US or European firms were more likely to be buying assets in emerging markets. As such, Western firms were more often conducting pre-acquisition due diligence.
This would change as more mainland firms considered acquisitions overseas, Auerbach said. 'They will like to check for corruption risks before the deals are done.'