The firm commissioned research by YouGov which found that 81% of middle market businesses consider themselves at risk of breaching AML or anti bribery rules. The survey, of more than 300 UK middle market business leaders, also revealed that 31% of firms have suffered, unwittingly or otherwise, in incidents that are outside of the law.

Despite this, nearly 60% of those questioned felt that non-financial reporting, covering their approach to handling such risks, is excessive or demanding – diverting major resources and hindering company operations.

Richard Smith, partner and head of risk assurance at RSM, said: ‘Our research suggests a worrying “cake and eat it” mind-set within middle market business.

‘On the one hand businesses recognise the major risks they face, yet on the other hand remain reluctant to fully engage in a process that minimises the risk and associated liabilities.

‘Furthermore, if done well, it can engender stakeholder confidence and business value. Of course, in doing this business can also often gain a much broader competitive advantage.’

In the more extreme cases, 97% of businesses operating in the construction sector and 86% of businesses in Scotland felt at risk from both money laundering and bribery and/or corruption. Yet in both instances, 62% considered the associated monitoring and reporting requirements to be excessive or demanding.

RSM points out that recent changes in legislation mean that financial metrics can no longer form the only yardstick of business success. The firm argues new non-financial reporting requirements also provide the public, the media and employees with an open window into the inner workings of organisations.

These include metrics produced to meet the general data protection regulations (GDPR), gender pay gap and pay equality statistics, payment practice information and modern slavery statements.

Carolyn Brown, head of client legal services at RSM, said: ‘The past decade has seen a major shift in our understanding of what constitutes a well-run business. Performance measurement goes far beyond the company balance sheet. Good business ethics, and the ability to demonstrate those credentials through accountability and transparency are more important than ever before.

‘In a tightening regulatory environment, outmoded thinking around non-financial reporting, or governance, will leave you and your organisation exposed.’

RSM’s report, Beyond the balance sheet: helping you bring governance into focus is here.

Report by Pat Sweet