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Economic crime rises worldwide, led by theft and procurement fraud - survey

Source: Thomson Reuters Foundation - Thu, 20 Feb 2014 05:59 GMT
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WASHINGTON (Thomson Reuters Foundation) - Economic crime is rising globally, led by theft and procurement fraud, and crime is worsening in fast-growing emerging markets, according to a leading survey of corporate employees released on Wednesday.

More than one in three organisations - 37 percent of respondents in PwC’s 2014 Global Economic Crime survey - said they were victims, up from 34 percent in the 2011 survey. While reports of economic crime peaked at 45 percent in 2005, since the end of the financial crisis the survey shows it trending upward again.

Asset theft was the most common economic crime, reported by 69 percent, followed by 29 percent for procurement fraud and 27 percent for bribery and corruption, according to company employees surveyed in 95 countries. Bribery and corruption reports rose from 24 percent in the prior survey.

Regionally, corporations reported they experienced the most problems in Africa, where 50 percent of respondents said they were victims of economic crime. But that is an improvement from 59 percent in the 2011 survey. South Africa respondents, however, reported a deterioration, with 69 percent of respondents experiencing economic crime, up from 60 percent a few years ago.

The second worst region was North America, where 41 percent reported economic crime - little changed from the prior survey. Eastern Europe came in third at 39 percent, up from 30 percent in 2011.

The fast-growing emerging markets - namely the BRICS Brazil, Russia, India, China and South Africa, plus Turkey, Mexico and Indonesia - all reported economic crimes at 40 percent, up from 35 percent in the prior report, it said.

“Like a stubborn virus, economic crime persists despite ongoing efforts to combat it. No organisation of any size anywhere in the world is immune to the impact of fraud and other crimes,” said Steven Skalak, PwC Forensic Services partner.

“Those committing economic crime succeed by adapting to shifting global conditions like reliance on technology and the expansion of emerging economies,” he said.

Cybercrime was reported by 27 percent of respondents.

The 2014 Global Economic Crime Survey was completed by 5,128 respondents from 95 countries between August and October 2013. Of the respondents, 50 percent were senior executives, 35 percent represented publicly listed companies, and 54 percent were from organisations with more than 1,000 employees.

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