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Last Updated:[20-11-2009 06:37:59 EDT] Zoom in Zoom out Back to Tradenews

Survey Finds No Country is Immune to Economic Crimes

tradenews PricewaterhouseCoopers' (PwC) bi-annual Global Economic Crime Survey which gives exhaustive data on the business frauds found that no country was immune to corporate frauds. The findings of the survey indicated that besides the global economic stress, one-third of the organizations across the world, fell victim to economic crimes.

The online survey that was conducted between July and November with more than 3,000 respondents from 54 countries regarded asset misappropriation during the past 12 months as the number one enemy of corporate growth. The report stated that economic crime was intractable because of the many kinds of fraud and the broad range of employees involved in it.

Asset misappropriation or theft at 67 percent topped the economic crime chart, is the most pervasive, followed by financial statement fraud, at 38 percent, and bribery and corruption came third with 27 percent. Other reported crimes included intellectual property infringement, money laundering, tax fraud, insider trading and espionage.

The survey with assistance from the Fontainebleau, France-based INSEAD business school found economic crime remained rampant among organisations of all sizes, in all countries and industries despite increased regulatory action and anti-fraud controls in place. Of those respondents that identified underlying business pressures or incentives as the main reason for rising incidence of fraud, 47 percent said difficulty in achieving business targets and resultant job losses was the motivation for breaking the law.

71 percent of the respondents voted, Russia has the highest level of economic crime, followed by South Africa, 62 percent, Kenya, 57 percent, Canada, 56 percent and Mexico, 51 percent in the crime top 5 list. Low levels of economic crime were reported from Japan, 10 percent, Hong Kong (and China) 13 percent, and the Netherlands and Turkey, 15 percent each.

The most startling find was the change in internal fraudster profile with economic crimes committed by middle managers witnessing sharp rise at 42 percent of all internal frauds, up from 26 percent of 2007. On the contrary, the number of frauds involving senior execs declined over the same period from 26 percent to 14 percent. Tony Parton, a partner in forensic services at PwC said that increase in so-called "cappuccino crime," or offences committed by middle managers, made sense because that cross-section of the workforce had felt a particular pinch during the downturn.

By Jose Roy

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