PETALING JAYA, Jan 13 — Seven out of 10 top executives in Malaysia believe bribery and corruption are part and parcel of doing business in the country, according to a survey released today by one of the world's largest audit firms, KPMG.
KPMG's Fraud, Bribery and Corruption Survey 2013 found that 71 per cent of respondents “believed that bribery and corruption is an inevitable cost of doing business”.
The survey, which polled executives from 100 listed companies, also revealed that 64 per cent of respondents believed businesses in Malaysia cannot function without paying bribes.
In a news conference at the release of its survey, KPMG's managing partner Johan Idris warned that accepting bribery and corruption as part of doing business in the country could have dangerous consequences, with little impetus to root out corrupt practices.
“It could result in the cultivation of a somewhat lenient and tolerant attitude towards the occurrences of fraud," he said.
The survey also found an increase in the perception of fraud. Eighty-nine per cent of respondents felt that the quantum of fraud had increased over the past three years while 94 per cent thought that fraud had become more sophisticated.
Additionally, almost one in two respondents said their organisations were victims of fraud.
“The survey findings also revealed that bribery and corruption would pose the biggest risk to companies in the years to come," Johan added.
The survey was conducted between January 2010 and December 2012, with respondents mainly drawn from companies with revenues between RM50 million and RM100 million.
For companies, the need to “win or retain” contracts and “to get routine administrative approvals from government agencies” were seen as the main reasons fuelling corruption, the survey showed.
It added that poor internal mechanisms, the lack of awareness and an inability to flag obvious instances of corruption were cited as the top three factors why companies were not able to weed out offenders.
Employees succumbed to corruption because of greed and lifestyle as well as financial pressures, according to the survey.
But Malaysian Anti-Corruption Commission (MACC) chief Tan Sri Abu Kassim Mohamed, who launched the survey, said the opinion of the executives polled clashed with another report which ranked Malaysia in the sixth place in terms of ease of doing business.
“How can you easily do business when at the same time you have big problems of corruption or a perceived problem of corruption?” he said.
According to the World Bank’s Doing Business 2014 Report, Malaysia rose six spots from 12th to 6th
Last year, the MACC recorded an 85 per cent conviction rate, exceeding the 80 per cent international benchmark.
