This survey from PwC investigates the root causes of economic crime and the way in which it affects businesses worldwide. More than 3,000 respondents in 54 countries completed a web-based survey. The aim of the survey was primarily to asses corporate attitudes towards economic crime in the current economic environment in order to understand how economic crime changes during a downturn.
Selected findings:
Despite the attention of regulators and companies' investment in controls, fraud remains one of the most problematic issues for companies around the world.
The actual level of economic crime and associated financial and non-financial losses has not decreased. One third of companies fell victim to economic crime in the past twelve months.
Accounting fraud has increased. This encompassed a variety of fraudulent activities including accounting manipulations, fraudulent borrowing/raising of finance, fraudulent application for credit and unauthorized transactions/rogue trading. Relatively high levels of bribery and corruption were also reported by respondents from the engineering and construction industries (47%) and energy and mining industries (43%)
Organisations that experienced economic crime reported that 53% of perpetrators were internal and 44% were external. The profile of the internal fraudster has changed with middle managers accounting for 42% of economic crimes, up 26% in 2007.
The industry sectors that reported most economic crime are communications, insurance, financial services and hospitality and leisure.
The report concludes that companies cannot rely on fraud controls alone to detect and deter economic crime. Companies need to build loyalty to the organisation, give employees the confidence to do the right thing, and put in place clear sanctions for those who commit fraud, regardless of their position in the company.
The full report can be downloaded from PricewaterhouseCooper’s website
Photo from Creative Commons: Flickr: Gunnar Wrobel
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