find the latest legal job
Corporate and Commercial Partner
Category: Corporate and Commercial Law | Location: Adelaide SA 5000
· Full time · Join a leading Adelaide commercial law firm
View details
In-house Legal Counsel & Commercial Lawyers
Category: Corporate and Commercial Law | Location: All Sydney NSW
· Providing lawyers with flexibility and control over when they work, how they work and who they work for.
View details
In-house Legal Counsel & Commercial Lawyers
Category: Corporate and Commercial Law | Location: All Melbourne VIC
· Providing lawyers with flexibility and control over when they work, how they work and who they work for.
View details
Legal Inhouse / Lawyer / Company Secretary
Category: Other | Location: Brisbane QLD 4000
· Fantastic Company · Potential to be Part Time / Flexible Work Pattern
View details
Infrastructure Lawyer/SA
Category: Construction Law | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Global elite law firm · Dedicated Infrastructure team
View details
Corporate bribery and fraud going unpunished

Corporate bribery and fraud going unpunished

A growing number of Australia’s senior executives believe companies are not penalising individuals who breach bribery and fraud laws to retain or win new business, new research has shown.

Of the 50 Australian executives interviewed by Ernst & Young (EY) for its Annual Global Fraud survey, 44 per cent said that, despite adequate anti-corruption laws being in place, people were not being disciplined for violating them.

“With regard to corruption and bribery, Australia certainly has good policies and good control frameworks in place, what’s lacking is prosecutions,” Paul Fontanot (pictured), Ernst & Young’s Fraud Investigation & Disputes Services Leader, told Lawyers Weekly.

“What is amazing is that there hasn’t been one prosecution in Australia under the legislative framework for fraud and corruption. Yes, there have been admissions of guilt, but nothing has been tried and tested in the courts.

“To me, it is surprising … if we want to build a culture where this type of behaviour isn’t tolerated it must start at the top, so my question is: why aren’t people being prosecuted?”

Fontanot listed a disparity in the priority of the investigation function and that of the prosecution function as one of the main reasons for the lack of prosecutions.

“They are two separate entities of government, so something might well be investigated but the entity prosecuting it might not have the same priority level,” he said.

Cashing in

The EY survey of more than 1700 executives worldwide found that an alarming 15 per cent said they were prepared to make cash payments to win business, up from nine per cent in the previous study.

The survey of CFOs, heads of legal, compliance and internal audit found that, for an increasing number of executives, it was the pressure to meet revenue growth targets that was undermining their commitment to comply with policies and the law.

The unscrupulous behaviour executives would not rule out included misstating financial statements, or providing personal gifts or cash to secure business.

Financial statement fraud remains a danger, with five per cent of the respondents saying they are willing to misstate financial performance, up three per cent.

Out of the 50 Australian executives surveyed, 12 per cent were general counsels for legal and compliance, 36 per cent were finance and 43 per cent were internal audit and risk. Sixty per cent of the Australian companies surveyed had revenues greater than $1 billion.

Fontanot said executives are been driven by market uncertainties and declining economic growth forecasts, with many companies struggling to maintain margins.

“There’s a need to make sure you win the work and that you stay ahead of your profit forecast,” he said. “There seems to be an absolute need to get work in the door in this tough economic time.”

The report found that 47 per cent of the 400 chief financial officers surveyed felt they could justify potentially unethical practices to help business survive during an economic downturn.

“CFOs need to maintain high ethical standards because of the key role they play in preventing fraud, bribery and corruption. To do this, they need to ensure that they themselves are trained, that they increase their awareness of the risks while clearly demonstrating support for anti-corruption initiatives,” said Fontanot.

The survey also showed that 30 per cent of Australian respondents supported a scheme to establish financial incentives for whistleblowers - a method successfully adopted in the US in 2010 under the Dodd-Frank Act.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Corporate bribery and fraud going unpunished
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Nov 24 2017
Demand lifts in 2017/18 for short-term finance to cover crises
Promoted by NWC Finance. The first five months of the 2017-18 financial year have seen unpreceden...
LCA welcomes religious freedom panel
Nov 24 2017
LCA welcomes religious freedom panel
The Law Council of Australia says the establishment of a panel which will examine the human right to...
Law Society launched a new website, legal politics and lawmaking
Nov 24 2017
Law Society launches project to engage young Aussies
The Law Society of NSW has launched a new website to engage young Australians in legal politics and ...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...