Mumbai/New Delhi: Demonetisation, which aimed at hitting out at the cash element in the economy to curb corruption and black money, has had a mixed impact, according to the the EY Fraud Survey 2017.
While a majority of the respondents in EY’s Europe, Middle East, India and Africa (EMEIA) Fraud Survey support the stance taken by the regulators and the government to curb corruption and bribery, the youth is still willing to make payments in cash to help their businesses survive.
“One of out of every four of generation Y (25-34 years old) could justify offering cash payments to win or retain business,” said the EY survey.
In India, however, 32% of youth are willing to deal in cash to help businesses survive.
The survey was conducted between November 2016 and January 2017, the period when India was going through the demonetisation exercise to reduce the cash element in the economy.
A huge 73% of youth feels that unethical action can be justified to help a business survive, adds the EY survey.
Unethical behaviour at the workplace has become a serious concern for corporate India as employees refuse to report fraud, bribery and corruption to enhance career prospects, the report suggests.
“There is also a general sense in youth that their colleagues are willing to act unethically to better their careers,” said Arpinder Singh, partner and national leader, Fraud Investigation & Dispute Services, Ernst & Young LLP.
“To my mind this kind of tendency stems from the deep rooted belief that corruption is part of the society. But, this needs to stop, as they are our future leaders. If companies do not take action now to combat unethical conduct at all levels of their organizations, such behaviours may increase in the future,” he adds.
The Ey survey identified three reasons to justify unethical behaviour—uncertainties in the business environment, augmenting pressure to meet financial targets and aspirations to achieve unprecedented career growth.
As many as 41% of employees in India are ready to act unethically to enhance their own career, while 13% are prepared to provide false information to improve their career or pay, according to the India findings of the survey.
30% of Indian employees are ready to book revenues earlier than they should in order to meet financial targets, while 16% would deliberately mis-state their company’s financial performance to meet financial targets.
Singh said these tendencies can be tackled by mentoring, coaching and monitoring.
“Monitoring also throws up another debate that is on ‘privacy’,” says Singh.
Companies generally take to checking emails, call records, tracking social media profile as monitoring tools. 89% of people surveyed by EY consider this as a breach of privacy.
“There needs to be a clear policy, to what extent a company can monitor,” Singh said.
While Indians still consider corruption as normal and India is ranked at number 79 in global corruption perceptions index, Indians have taken regulatory scrutiny in their stride.
“Overall 28% of our respondents believe that regulation has had a positive impact on ethical standards in their company, increasing from 24% in 2015,” said the EY report.
77% of respondents also feel that prosecuting individuals will improve ethical behaviour.
52% said that regulatory activity has had a positive impact within the company and industry.
A huge 79% of participants in India said that prosecuting individuals would help deter fraud, bribery and corruption, while 78% said that bribery and corruption is widespread, compared to 51% globally. Strikingly 68% of the youth or millennials also believe the company management would engage in unethical behaviour to help a business survive.