New York (Sept. 15, 2003) -- The picture of worldwide corporate crime is grim.

That’s the finding of a recent PricewaterhouseCoopers survey which found that 37 percent of the companies that responded to its Global Economic Crime Survey said they had suffered serious losses from economic crime in the past two years.

Nearly one-third of the victims also said they couldn’t put a price tag on their loss, but the average for those that did crunch the numbers was a whopping $2.2 million.

PwC found that companies that don’t track or estimate their losses tend to spend less on prevention, resulting in further losses. And when companies did put a figure on their losses, the numbers were significant.

Industrial espionage topped the list of fraud losses, with average losses totaling $4.19 million. Product piracy ranked 2nd with $3.87 million in losses, corruption/bribery accounted for $3.77 million, asset theft came to $1.39 million and cybercrime totaled $812,318.

The survey also found that while respondents accurately perceive their risk of asset misappropriation and product piracy, they believe corruption and bribery are five times more prevalent than they actually are.

In addition, while the problem is most acute in Africa, where 51 percent of respondents have been hit with significant economic crime, it is not a “developing nation” problem.

North America ranked No. 2 with 41 percent of U.S. companies suffering significant loss from economic crime in the past two years.

Among other findings:

  • Companies discovered 32 percent of all fraud by sheer accident
  • Nearly 75 percent of victims of economic crime recovered less than 20 percent of their losses, and only 50 percent held fraud insurance.
  • One-third of those surveyed said the company board was ultimately responsible for preventing economic crime – but only 25 percent had offered board members risk management training.

-- WebCPA staff

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access