Irregular financial reporting is becoming a worry for corporate South Africa with recent research showing a greater awareness among directors and senior managers of the practice. Other investigations are highlighting a growing mistrust among staff members in big companies and a developing gulf between management and employees.
New research on integrity and employee satisfaction by iFacts, a leader in screening, information verification and integrity testing, show that only 50% of staff members in big companies trust one another whilst around half feel that they get on with management. "Our investigations illustrate that although there is a general understanding of company policy and compliance 47% of employees do not believe their firm's anti-corruption policy is effective," says iFacts MD Jenny Reid. "Alarmingly, close to 70% of sales staff consider bribery and other corrupt practices to be rife".
iFacts findings are broadly in sync with Ernst and Young's 2013 fraud survey which notes that 42% of board directors and senior managers are aware of some irregular financial reporting in their company whilst 57% feel that this practice is widespread in South Africa. Its results also indicate that the risk of misreporting financial information appears compounded by the fact that 79% of managers feel that they need to deliver better financial results for the company but there is increased pressure on remuneration with 23% having pay freezes and 17% having their bonuses removed.
"iFacts research has also shown that management, as opposed to employees, are the single greatest source of white collar fraud in organisations," says Ms Reid. "Verification of the documentation presented by applicants at the interview stage, whether for management or other staff positions, can prevent much of the fraud from taking place. But companies need to have management tools in place to continuously measurement commitment to company policies."
Post employment screening will also help to pro-actively detect fraud.
"In 21% of cases where fraud has been committed, the guilty parties evidenced an obvious change in lifestyle, driving better cars and having more material goods than before, things which could easily have been spotted if the company had only looked," she says.
70% of sales staff consider bribery and corrupt practices to be rife in their company
Irregular financial reporting is becoming a worry for corporate South Africa with recent research showing a greater awareness among directors and senior managers of the practice. Other investigations are highlighting a growing mistrust among staff members in big companies and a developing gulf between management and employees.
New research on integrity and employee satisfaction by iFacts, a leader in screening, information verification and integrity testing, show that only 50% of staff members in big companies trust one another whilst around half feel that they get on with management. "Our investigations illustrate that although there is a general understanding of company policy and compliance 47% of employees do not believe their firm's anti-corruption policy is effective," says iFacts MD Jenny Reid. "Alarmingly, close to 70% of sales staff consider bribery and other corrupt practices to be rife".
iFacts findings are broadly in sync with Ernst and Young's 2013 fraud survey which notes that 42% of board directors and senior managers are aware of some irregular financial reporting in their company whilst 57% feel that this practice is widespread in South Africa. Its results also indicate that the risk of misreporting financial information appears compounded by the fact that 79% of managers feel that they need to deliver better financial results for the company but there is increased pressure on remuneration with 23% having pay freezes and 17% having their bonuses removed.
"iFacts research has also shown that management, as opposed to employees, are the single greatest source of white collar fraud in organisations," says Ms Reid. "Verification of the documentation presented by applicants at the interview stage, whether for management or other staff positions, can prevent much of the fraud from taking place. But companies need to have management tools in place to continuously measurement commitment to company policies."
Post employment screening will also help to pro-actively detect fraud.
"In 21% of cases where fraud has been committed, the guilty parties evidenced an obvious change in lifestyle, driving better cars and having more material goods than before, things which could easily have been spotted if the company had only looked," she says.