Fraud Survey: Encuesta Global del Fraude de EY

Overcoming compliance fatigue Reinforcing the commitment to ethical growth

13th Global Fraud Survey - findings for Spain

June 2014

Survey approach and participant profile

► Between November 2013 and February 2014, our researchers conducted 2,719 interviews with

various executives in 59 countries and territories.

► Interviewees were selected from a sample of the largest companies in each country. Employees

interviewed included industry leaders – chief executive officers (CEOs), chief financial officers

(CFOs), chief compliance officers (CCOs), general counsel and heads of internal audit. Interviews

were conducted on an anonymous basis in the local language by telephone or in person. Details of

the full survey are shown below:

► 50 interviews were conducted in Spain

► Results are compared with findings for Western Europe*, developed markets*, emerging markets*

and all respondents

► Please note that, due to rounding or the omission of percentages to allow better comparison, some

figures may not sum to 100%

Job title % of respondents

CFO 28%

Other finance 23%

Head of internal audit 9%

Other audit/risk 9%

General counsel 7%

CEO 6%

Head of marketing/sales 4%

CCO 3%

Other 11%

Revenue % of respondents

More than US$5b 6%

US$1b-US$5b 18%

US$500m-US$0.99b 13%

US$100m-US$499m 30%

US$99m or less 31%

Above US$1b 24%

Below US$1b 73%

13th Global Fraud Survey Page 1

* Details of countries categorized as Western Europe, developed markets and emerging markets can be found in the appendix.

June 2014

Western

Europe

Developed

markets

Emerging

markets

All

respondents

28 30 28 29

10 11 17 14

8 7 16 13

3 4 8 6

35 38 45 42

Figures 1,5&10: Unethical behavior persists

Q. Which, if any, of the following do you feel can be justified if they help a business survive an economic downturn? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)

% don't know and none of the above have been omitted to allow better comparison between responses given

18

12

10

8

36

Offering entertainment towin/retain business

Personal gifts towin/retain business

Cash payments towin/retain business

Misstating company’s financial performance

At least one of these canbe justified

13th Global Fraud Survey Page 2 June 2014

% Agree

% Agree

Spain

Challenges in addressing new risks - cybercrime

26

35

34

28

31

14

13

14

20

17

42

36

33

28

30

16

14

17

20

19

How much of a risk would you say cybercrime poses to organizations like yours?

Figure 2: Cybercrime - a real and growing risk

Q. How much of a risk would you say cybercrime poses to organizations like yours? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)

% don't know and refused have been omitted to allow better comparison between responses given

% Very/fairly

high risk

58

50

50

48

49


Spain

Western Europe

Developed

markets

Emerging

markets

All respondents

% Very low risk % Fairly low risk % Fairly high risk % Very high risk

4

16

40

38

58

Foreign nation states

Organized crime

Employees orcontractors

Competitors

Hackers or hacktivists

Figure 3: Threats from within and without

Q. Thinking of the following sources of cybercrime, which one or two of the following, if any, concerns you the most? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)

% don't know and none of the above have been omitted to allow better comparison between responses given

Western

Europe

Developed

markets

Emerging

markets

All

respondents

7 8 5 6

27 25 25 25

33 34 33 33

33 31 35 34

47 50 47 48

% Agree


% Agree

Spain

Fraud - long-standing risks present challenges too

13th Global Fraud Survey Page 7

Figure 4: Fraud – a challenge for all economies

Q. Has your organization experienced a significant fraud in the last two years?

Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)

6

12

12

11

12

% Yes

Spain

Western Europe

Developed

markets

Emerging

markets

All respondents

Has your organization experienced a significant fraud in the last two years?

June 2014

Western

Europe

Developed

markets

Emerging

markets

All

respondents

28 28 37 33

12 11 17 14

9 9 13 11

7 7 10 8

56 57 45 50

42 41 52 47

Figure 6: Bending the rules or breaking the law?

Q. Given the pressure that often exists to meet financial targets, which, if any, of the following activities do you feel can be justified to meet those

targets? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


12

12

4

4

72

28

More flexible productreturn policies

Change assumptionsdeterminingvaluations/reserves

Extend monthlyreporting period

Backdate a contract

None of these

At least one of these


% Agree

% Agree

Spain

Bribery and corruption - are compliance efforts running out of steam?

Figure 8: Bribery and corruption unchanged

Bribery/corrupt practices happen widely in business in this country

Q. For each of the following, can you tell me whether you think it applies, or does not apply, to your country or industry or whether you don’t know?

Bribery/corrupt practices happen widely in business in this country Base: Spain 2014 (50), 2012 (50); Western Europe 2014 (636), 2012 (652); developed markets 2014 (869), 2012 (877); emerging markets 2014 (1159),

2012 (931); all respondents 2014 (2028), 2012 (1808)

% don't know has been omitted to allow better comparison between responses given

Note that the results shown are adjusted to reflect the profile of respondents from the current survey compared to our previous survey (like for like).

% Does not apply % Applies

28

34

20

22

19

19

54

56

39

38

56

60

74

71

75

72

34

33

52

52

Spain 2014

Spain 2012

Western Europe 2014

Western Europe 2012

Developed markets 2014


Emerging markets 2014


All respondents 2014



Figure 9: Cheques and balances - asked to pay a bribe in a business situation

Q. Have you ever been asked to do any of the following? Pay a bribe in a business situation Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


Have you ever been asked to pay a bribe in a business situation?


0

3

3

10

7

100

96

96

89

92

Spain

Western Europe

Developed

markets

Emerging

markets

All respondents

% No % Yes

Page 12

Figure 9: Cheques and balances - asked to make a charitable contribution

Q. Have you ever been asked to do any of the following? Make a charitable contribution by a customer or client Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


Have you ever been asked to make a charitable contribution by a customer or client?

4

14

15

23

20

96

84

83

75

78

Spain

Western Europe

Developed

markets

Emerging

markets

All respondents

% No % Yes

June 2014 13th Global Fraud Survey

Figure 9: Cheques and balances - asked to pre- or post-date a contract

Q. Have you ever been asked pre- or post-date a contract? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


Have you ever been asked to pre- or post-date a contract?


16

20

17

17

17

84

79

81

81

81

Spain

Western Europe

Developed

markets

Emerging

markets

All respondents

% No % Yes

Figure 11: Has compliance stalled? Anti-bribery/anti-corruption policy

54

74

87

84

87

86

78

76

82

81

36

22

11

14

11

12

18

21

15

17

We have an anti-bribery/anti-corruption policy and code of conduct

Spain 2014

Spain 2012

Western Europe 2014

Western Europe 2012







Q. For each of the following, please tell me whether it applies, or does not apply, to your organization, or whether you don’t know? Base: Spain 2014 (50), 2012 (50); Western Europe 2014 (636), 2012 (652); developed markets 2014 (869), 2012 (877); emerging markets 2014 (1159),

2012 (931); all respondents 2014 (2028), 2012 (1808)


Note that the results shown are adjusted to reflect the profile of respondents from the current survey compared to our previous survey (like for like). Whereas, the

country breakdown on the following slide reflects the unadjusted results of all respondents.



Figure 11: Has compliance stalled? Senior management commitment

Senior management has strongly communicated its commitment to our

anti-bribery/anti-corruption policies

70

86

84

84

85

86

82

82

83

84

22

10

13

14

13

12

13

15

13

14

Spain 2014

Spain 2012

Western Europe 2014

Western Europe 2012










2012 (931); all respondents 2014 (2028), 2012 (1808)




Figure 11: Has compliance stalled? Clear penalties

There are clear penalties for breaking our anti-bribery/anti-corruption policies

56

68

73

72

76

75

71

68

73

71

38

28

23

23

21

20

21

27

21

24

Spain 2014

Spain 2012

Western Europe 2014

Western Europe 2012










2012 (931); all respondents 2014 (2028), 2012 (1808)




Page 17

Figure 11: Has compliance stalled? People penalized for breaching policies

People have been penalized for breaching our anti-bribery/anti-corruption policies


June 2014

20

50

31

39

30

39

40

49

35

44

68

38

55

50

54

49

46

41

50

45

Spain 2014

Spain 2012

Western Europe 2014

Western Europe 2012







13th Global Fraud Survey


2012 (931); all respondents 2014 (2028), 2012 (1808)




Figure 12: Demonstrating commitment, or not?

Q. Have you attended anti-bribery/anti-corruption training? Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


Have you attended anti-bribery/anti-corruption training?

38

59

58

40

47

62

41

42

59

52

Spain

Western Europe

Developed

markets

Emerging

markets

All respondents

%No %Yes


Figure 13: Risk assessments - reflecting the breadth of experience?

Q. In the past two years, which, if any, of the following has your company asked you to participate in? An anti-bribery/anti-corruption risk assessment Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


In the past two years, has your company asked you to participate in

an anti-bribery/anti-corruption risk assessment

32

42

41

31

35

68

57

57

65

62

Spain

Western Europe

Developed

markets

Emerging

markets

All respondents


%No %Yes

Risks old and new require a dynamic response

Figure 15: Perceptions of bribery/corrupt practices in this country

Bribery/corrupt practices happen widely in business in this country

Q. For each of the following, can you tell me whether you think it applies, or does not apply, to your country or industry or whether you don’t know?

Bribery/corrupt practices happen widely in business in this country Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)



28

18

17

53

38

56

75

76

33

51

Spain

Western Europe

Developed markets

Emerging markets

All respondents


Spain

Western Europe

Developed markets

Emerging markets

All respondents

Page 22

Figure 15: Perceptions of bribery to win contracts in our sector

Q. For each of the following, can you tell me whether you think it applies, or does not apply, to your country or industry, or whether you don’t know?

In our sector, it is common practice to use bribery to win contracts Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


In our sector, it is common practice to use bribery to win contracts


6

5

5

18

12

92

92

92

74

82


38

59 58

40

47

0 3 3 10 7

Spain Western Europe Developed markets Emerging markets All respondents

Figure 17: Bribery training vs. incidence of bribery

Q. Have you attended anti-bribery/anti-corruption training?

Q. Have you ever been asked to do any of the following? Pay a bribe in a business situation Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)

% Have attended anti-bribery/anti-corruption training

% Have been asked to pay a bribe in a business situation


32

41

40

36

38

66

57

58

61

59

Figure 18: Focusing effort efficiently

Q. In the past two years, which, if any, of the following has your company asked you to participate in? An interview by an internal auditor in relation to

anti-bribery/anti-corruption compliance Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


In the past two years, has your company asked you to participate in an interview by an

internal auditor in relation to anti-bribery/anti-corruption compliance?

Spain

Western Europe

Developed

markets

Emerging

markets

All respondents

% No % Yes


20

53

58

46

51

72

44

39

49

45

Page 25

Figure 20: Whistleblowing - issues not being heard

Q. Which of the following systems or processes does your organization have for monitoring compliance with anti-bribery and anti-corruption laws?

Whistleblowing hotlines Base: Spain 2014 (50); Western Europe 2014 (852); developed markets 2014 (1103); emerging markets 2014 (1616); all respondents 2014 (2719)


Whistleblowing hotlines

Spain

Western Europe

Developed

markets

Emerging

markets

All respondents


% No % Yes

Appendix

Page 27

Number of Spain interviews: role, sector, revenue

13th Global Fraud Survey June 2014

Sector

Automotive 1

Consumer products, retail, wholesale 16

Financial services 1

Government and public sector -

Life sciences 2

Manufacturing and chemicals 7

Oil, gas, and mining 1

Power and utilities 3

Professional firms and services 8

Real estate 3

Technology, communications, and

entertainment 3

Other transportation 2

Other sectors 3

Job function

Finance 27

Internal Audit and Risk 11

Legal 2

Compliance 1

Other executives 9

Base: All respondents in Spain (50)

Note: Revenue figures exclude respondents who said don’t know or refused

Revenue

More than $1 billion 10

$500 million to $1 billion -

Less than $500 million 40

Profile of research sample

► Western Europe results are based on 852 interviews across 17 countries – Austria, Belgium,

Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway,

Portugal, Spain, Sweden, Switzerland, and the UK.

► Developed market results are based on 1,103 interviews across 23 countries – Australia, Austria,

Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg,

Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, UK and US.

► Emerging market results are based on 1,616 interviews across 36 countries and territories –

Argentina, Brazil, Chile, China, Colombia, Croatia, Czech Republic, Egypt, Estonia, Hong Kong

SAR, Hungary, India, Indonesia, Israel, Jordan, Kenya, Latvia, Lithuania, Malaysia, Mexico,

Namibia, Nigeria, Philippines, Poland, Romania, Russia, Saudi Arabia, Serbia, Slovakia, Slovenia,

South Africa, South Korea, Turkey, UAE, Ukraine and Vietnam.

► New Zealand’s survey results are included in the Oceania regional figures but due to the low base

size no country level figures are shown.

► Baltic States include: Estonia, Latvia and Lithuania

► Middle East includes: Jordan and UAE


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Fraud Survey: Encuesta Global del Fraude de EY