A fresh study by consulting firm Ernst & Young revealed that as many as 7% of managers in Estonia have paid bribes, LETA/Public Broadcasting reports.
“The attitudes regarding business ethics among Estonia’s leaders that the study highlighted were surprising in quite a few aspects,” said Ernst & Young Baltic AS certified financial fraud investigator Marilin Pikaro.
She pointed out that in developed countries, generally 3% of managers have given a bribe.
One third of the Estonian company managers believe that gifts and entertainment to maintain or create business relationships is justified. This is three times more than the average of developed countries.
Pikaro said that over the past two years, a half of Estonian companies have had experiences with a fraud case, while in 26% of cases this generated damages exceeding 10,000 euros.
The main methods for fraud prevention and detection that Estonian organizations use are financial audit (95% of respondents) and internal audit (79%). Also, the background of employees and partners is checked (78% of respondents).
“What is surprising is the fact that the above-mentioned mechanisms are among the least effective in fraud risk management,” said Pikaro. “Traditionally, fraud cases are ascertained the fastest via a hint or chance, while Estonian companies do not prefer these measures,” she added.
Only 34% of organisations use a tip hotline for ascertaining fraud risk while 39% of organisations use surprise audits.
Source: The Baltic Course
http://www.baltic-course.com/eng/analytics/?doc=93009