Research from accountancy giant Ernst & Young has found that more than one in five British businesses do not ‘frequently’ perform pre-acquisition due diligence in relation to issues including fraud, bribery and corruption.

The firm’s 2012 Global Fraud Survey, Growing Beyond: a place for integrity, reveals that only 60 per cent of those questioned admit to carrying out due diligence after the sale.

The findings come less than a year after the UK Bribery Act came into force. New legislation means that companies face fines or imprisonment of executives if ‘adequate procedures’ are not carried out.

Further results show that, despite the statistic that one in five are failing to conduct checks, the proportion of those conducting pre-deal due diligence has risen from 59 per cent to 79 per cent in two years. Post-acquisition processes mirror the results, posting an increase from 36 per cent to 60 per cent.

China has been found by Ernst & Young to be the nation cutting back most when it comes to the screening process. The proportion of respondents in the Asian country who admitted to never undertaking due diligence has doubled to 50 per cent since the study was last conducted. India has demonstrated a similar shift, up from 30 per cent to 50 per cent.

John Smart, partner at Ernst & Young Fraud Investigation & Disputes Service, comments, ‘It is essential that anti-bribery and corruption due diligence starts as early as the strategic decision-making phase.

‘The sooner issues are identified, the sooner an acquirer can understand the financial and operational implications of a deal, discuss any issues with a regulator or potentially walk away should this prove necessary.’

Smart believes that the survey’s findings could be an indication that, in the current financial climate, companies are under increasing pressure to close acquisitions as quickly as possible.