In this rapidly changing global regulatory environment, fraughtwith tempestuous economic conditions, it can be difficult for manycompanies to persevere and continue to grow while remainingethically above board and compliant.

To this end, Ernst & Young (E&Y) yesterday released theresults of its 2012 Global Fraud Survey. The study, whichfeatures findings on fraud, bribery and corruption, gatheredresponses from more than 1,700 executives across 43 countries,including heads of legal, compliance and internal audit departmentsand chief financial officers (CFOs).

The 12th annual Global Fraud Survey found that the record levelsof fines, penalties and profit disgorgements secured by the U.S.Department of Justice and Securities and Exchange Commission in2011 raises both the perceived and actual cost of noncompliance.Because of this, E&Y says that companies and their boards mustweigh the risks associated with varying degrees of complianceenforcement within their organizations. And moving into new marketsdefinitely introduces additional risks.

The survey also found that corporate boards and audit committeescontinue to face substantial challenges in tackling fraud, briberyand corruption, and that many companies are failing to successfullymitigate the risks they present.

Dovetailing with this, E&Y says that boards also arestruggling to effectively absorb the massive amounts of complianceinformation placed before them. The study suggests that corporateboards and compliance managers consider the following whenresponding to these challenges:

1. They must ensure effective lines of communication with a broadrange of roles within the business. This will enable boards toquestion the information that they are given.
2. They can make improvements to focus compliance reporting to theboard.
3. Boards must make sure that they are asking the right questions.These could include:

• Does management at the headquarter level understand localrisks, and have strategies been developed to deal with thesespecific risks?

• Can management demonstrate the contemporaneous effectivenessof its anti-corruption compliance efforts to its stakeholders?

• Does the company know how many third parties and agentsrepresent it, particularly in dealing with those that could beconsidered “government officials”?

• Is management making the best use of the latest forensic dataanalytics techniques to monitor compliance in real time?

• Assuming that contracts with third parties normally containaudit rights, how many times has the company conducted an auditprincipally to gain comfort around bribery and corruption risk?

• Does the company have clear criteria to guide it with respectto how extensive pre- or post-acquisition anti-corruption duediligence should be, or whether to conduct it at all?

Should companies make a concerted effort to target areas ofpotential risk exposure, and management lead by example, E&Ysays companies should be able to properly balance the priorities ofgrowth and ethical business conduct.

To read the complete survey, visit Ernst & Young's website.