Nearly half of all business organizations worldwide have been victims of fraud in the past two years, according to the 2005 PricewaterhouseCoopers' Global Economic Crime Survey released in late November.The survey found that the number of companies reporting fraud increased from 37 percent to 45 percent since 2003, a 22 percent increase. The cost to companies was an average of $1.7 million in losses from "tangible frauds," those resulting in immediate and direct financial loss, like asset misappropriation, false pretences or counterfeiting.
The biennial survey, conducted with Germany's Martin-Luther University, involved 3,634 companies from 34 countries. It revealed that total losses at the 1,227 of these companies that could quantify their losses exceeded $2 billion over the last two years. Companies around the world, on average, reported suffering eight fraud incidents since 2003.
The larger the company, the more likely that it experienced and detected acts of fraud. Larger companies reported an average of 12 incidents, and depending on the industry, between 38 and 60 percent of surveyed companies reported significant frauds.
"More companies are reporting financial crimes, they're reporting a higher number of incidents, and most cases are detected by accidental means," said global investigations leader Steven Skalak, in a statement. "Economic crime is not something to be taken lightly; companies need to tighten their controls to avoid not only direct financial losses, but also damage to their brand, to staff morale and to relationships with customers, suppliers and other business partners."
The report is available in the "Publications" section of PwC's Web site, www.pwc.com.
