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Special Feature On the Case
E The Rise of Economic Crime
Steven Skalak, PwC Forensic Services Partner.
“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 […]Those committing economic crime succeed by adapting to shifting global conditions like reliance on technology and the expansion of emerging economies.” Steven Skalak, PwC Forensic Services Partner.
conomic crime against businesses and other organisations continues to rise around the world. Some 37% of respondents, a 3% rise since 2011, say they have been victims of economic
crime, according to PwC’s 2014 Global Economic Crime Survey. And, about 25% say they have been victims of cybercrime, as fraudsters increasingly turn to technology as their main crime tool.
PwC’s global survey, the most extensive on the subject, found that theft remains the most common form of economic crime, reported by 69% of respondents. It is followed by procurement fraud, 29%, bribery and corruption, 27%, cybercrime, 24%, and accounting fraud, 22%. Other reported crimes include human resources fraud, money laundering, intellectual property or data theft, mortgage fraud and tax fraud.
The exact direct loss associated with economic crime is difficult to assess. Among crime victims, a total of 20% place the financial impact of economic crime on their organisation at more than US$1 million; and 2% of victims – representing 30 organisations -- put the impact at more than US$100 million each.
For the first time this year, the survey measures procurement fraud, reported by nearly 30% of respondents. Procurement fraud is seen as a double threat, victimising businesses both in their acquisition of goods and services and in their efforts to compete for new opportunities.
Respondents also report significant collateral damage in such areas as employee morale, cited by 31%, and in corporate reputation and business
relationships, both reported by 17%. Despite the financial and collateral effects of crime, just 3% of respondents said incidents of fraud have impacted their company’s share price.
“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 and lead editor of the survey. “Those committing economic crime succeed by adapting to shifting global conditions like reliance on technology and the expansion of emerging economies.”
“Even worse than the direct financial impact of economic crime is its threat to a wide range of business systems that are the lifeblood of corporate