TALLINN - A fresh study by consulting firm Ernst & Young revealed that as many as 7 percent of managers in Estonia have paid bribes, reports Public Broadcasting. “The attitudes regarding business ethics among Estonia’s leaders that the study highlighted were surprising in quite a few aspects,” said Ernst & Young Baltic certified financial fraud investigator Marilin Pikaro.
She highlights that in developed countries, generally around 3 percent 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 in developed countries.
Pikaro said that over the past two years, half of Estonian companies have had experiences with a fraud case, while in 26 percent of cases this generated damages exceeding 10,000 euros. The main methods for fraud prevention and detection that Estonian organizations use are financial audits (95 percent of respondents) and internal audits (79 percent). Also, background checks of employees and partners are used (78 percent 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 by chance, though Estonian companies do not prefer these measures,” she added. Only 34 percent of organizations use a tip hotline for ascertaining fraud risk while 39 percent of organizations use surprise audits.