Wealth management firms are currently facing the challenge of having to conform to a more highly-regulated environment following the financial crisis of 2008. Now, a new survey by consultancy firm Ernst & Young has highlighted that despite increased compliance programmes in the financial sector, a significant and influential group still regards unethical and business practices as acceptable.

Ernst & Young found in its latest fraud survey that at senior manager and board level 42 per cent of those asked said that sales or costs had been manipulated at their company, while 57 per cent believed bribery and corruption were widespread in their country.

One in five of nearly 3,500 employees surveyed in 36 countries in Europe, the Middle East, India and Africa said they were aware of financial manipulation in their own company in the last 12 months.

Pay cuts, pay freezes and increased pressure to meet growth targets are resulting in unethical practices and driving actions such as fraud, bribery and corruption that could damage the business, according to the consultancy.

"Companies in today's challenging market environment face sustained pressure to meet growth and profit expectations and some will inevitably succumb to unethical behavior. Shareholders expecting management to take ownership and to implement compliance programmes is simply not enough. Boards must challenge management to ensure that they are focused on the right high-risk areas," said Michael Faske, Swiss leader of Ernst & Young's fraud investigation and dispute services practice.

The most common frauds were revenues being recorded before they should be, the under-reporting of costs and customers being sold unnecessary products to meet short-term sales targets.

The survey found that 57 per cent of all respondents believed that bribery happens frequently in their countries. This figure rose to 67 per cent in rapid-growth markets.

The consultancy suggested the only effective way for firms to minimise risk is to acknowledge that fraud, bribery and corruption could happen in their organisation and profession.

"The survey reveals a worrying trend that many businesses are either ignoring or are blind to these risks. Employees see bribery and corruption happening widely in their country but do not acknowledge it as a risk in their own business or sector. The results seem to say everyone else is doing it, but not me or my business," Faske said.

The wealth management industry has come under growing pressure to tighten controls against corruption. In the UK, for example, the recently enacted Bribery Act imposes tougher rules on corporate and individual behaviour.

Following a three-year campaign by the international investment group Principles for Responsible Investment, several global companies that are potentially at risk of bribery and corruption scandals, including Hermes and F&C Asset Management, have taken major steps to improve transparency and disclosure of anti-corruption strategies. For more on this story, click here.