Pay cuts, salary freezes and tougher targets in the downturn are putting more pressure on UK employees to commit fraud according to research by Ernst & Young.
Nearly one in ten (7%) of UK respondents said they were aware of financial manipulation in their own company in the last twelve months, according to E&Y's 2013 Europe, Middle East, India and Africa (EMEIA) Fraud Survey.
The most common UK frauds are revenues recorded before they should be to meet short-term financial targets; under-reporting of costs; and customers required to buy unnecessary stock to meet short term sales targets.
In addition, the survey of over 3,000 board members and senior management in 36 countries, also reveals that a third of companies believe there is widespread bribery and corruption in the UK.
Despite the advent of the UK Bribery Act, 19% of UK executives felt it was justified to make cash payments to win or retain business - higher than the average of all countries surveyed.
The survey also found 9% of UK workers feel their bribery compliance programmes are damaging their ability to compete in the downturn. Under half (45%) of UK respondents agree their company's bribery or fraud policies are relevant to their work, while 17% say they are unaware of any such programme.
E&Y found that only 16% of managers were required to provide more detailed information on contracts signed with third party agents or suppliers, many of which are in countries where attitudes towards bribery, fraud or corruption are more complacent, according to the survey.
Overall the fraud survey showed that 58% of respondents in rapid growth markets considered unethical practices to be justified if they helped a business survive an economic downturn. E&Y says the challenge for UK companies is that more than a quarter of respondents in rapid growth markets agree their domestic enforcers regulate foreign businesses more closely than local ones.
John Smart, partner and UK head of E&Y's fraud investigation team, said: 'Businesses need to understand who the business partners and agents of the acquired business are through risk-focused due diligence. Although exporting to new markets is a crucial plank of our economic growth, it is important to understand any risks involved.'