‘SA companies top fraud survey’Comment on this story
Johannesburg - South African companies experience more fraud and bribery than their counterparts elsewhere in the world, a survey by PricewaterhouseCoopers has found.
They were being hit by a higher incidence in every category of economic crime except intellectual property infringement and mortgage fraud, it said in its Global Economic Crime Survey 2014 released on Tuesday.
Bribery and corruption had been the fastest growing economic crime category in South Africa since 2011.
The survey found senior management was the main perpetrator of economic crimes committed in the country.
“Our survey results indicate that the typical internal fraudster is male, aged between 31 and 40, has worked for his employer for more than 10 years, and has acquired a first university degree,” it said.
“This profile is consistent with South African organisations reporting that senior and middle management commit 77 percent of all internal fraud.”
In the survey, 5128 senior businessmen and women from 93 countries participated in an online survey during the fourth quarter of 2013.
This was the first time since 2005 the prevalence of economic crime had increased in South Africa.
“The latest results show that economic crime remains a serious challenge to business leaders, government officials and private individuals in South Africa.
“Sixty-nine percent of South African respondents indicated that they had been subjected to some form of economic crime in the 24 months preceding the survey, compared to 37 percent of global respondents.”
The report listed various crimes and the percentages of each crime experienced in the past 24 months in South Africa compared to the rest of the world.
In the past 24 months, 77 percent asset misappropriation was experienced in South Africa compared to 69 percent around the world.
South Africa experienced 59 percent procurement fraud in the past two years compared to 29 percent experienced globally.
Bribery and corruption stood at 52 percent in South Africa compared to 27 percent around the world.
Human resources fraud was at 42 percent in South Africa, and 15 percent globally.
The report found that the country experienced 14 percent money laundering, and globally it stood at 11 percent.
Tax fraud was at 11 percent in South Africa, and six percent globally.
It said South African respondents reported significantly more instances of procurement fraud, bribery and corruption, financial statement fraud and human resources fraud than their global counterparts.
“In the remaining categories, the distribution of economic crime in South Africa mirrors the global picture,” it said.
South African entities took no action in nine percent of cases, opted for transfers in two percent, or warnings in 18 percent of cases.
“This is worrying as it suggests that the perpetrators remain within the organisations where they may commit further transgressions,” it said.
“It is important for organisations to adopt a zero-tolerance approach by dealing with fraudsters in an official and transparent manner, rather than sweeping the problem under the carpet internally.” - Sapa