CAPE TOWN – South African organisations report the highest instances of economic crime in the world, according to PwC’s latest Global Economic Crime Survey 2018, which found that economic crime was harming businesses at a staggering rate throughout the world.
The survey findings showed that instances of economic crime reported in South African were at 77 percent, followed in second place by Kenya at 75 percent, and thirdly France at 71 percent. It found that half of the top 10 countries were in Africa.
It said 49 percent of organisations globally reported that they had experienced economic crime in the past two years.
But what about the other 51 percent? Have they avoided falling victim – or simply do not know about it?
PwC partner, forensic services and South Africa survey leader, Trevor White, said: “In our efforts of looking for fraudsters outside the gate, the risk of being cleaned out from the inside looms large.”
The PwC report reads: “Since fraud hides in the shadows, one of the most powerful weapons in a fraudster’s armoury is a lack of awareness within organisations. It is time for business to recognise the true nature of the threat, not just as a nuisance or cost of doing business, but a shadow industry with tentacles in every country, sector and functions.”
The broadest definition of fraud is criminal deception intended to result in financial gain. According to the report these acts of crime could be from customers trying to defraud a company, outsiders using technology to hack into to the company systems and from within the organisation itself.
White said while the personal profile of a fraudster was a broad concept, the environment was easier to understand and defend against. “Each condition, opportunity, pressure and rationalisation, needs a focused and detailed intervention that is holistic.”
The survey found that the antidote to opportunity was about far more than pouring resources into finding the culprits, it was about addressing the actual culture within the organisation.
The report stated that just as fraud did not happen through the agency of a single factor, but by a combination. Many businesses that focused primarily on technology resigned themselves to the belief that a certain amount of fraud was simply part of the cost of doing business.
“It doesn’t have to be like that,” said White. “When you consider the scale of losses caused every year by internal fraud, an investment in understanding and addressing your corporate culture may offer a surprisingly high return, assuming you already have a well-established control environment.”