According to Pricewaterhouse Coopers’ (PwC) biennial Global Economic Crime Survey, although the figures on economic crime in South Africa have remained unchanged at 69% from 2014, this is nearly double the global average.
The survey found that asset misappropriation remains the most prevalent form of economic crime reported by 68% of respondents. It is followed by procurement fraud (41%), and bribery and corruption (37%).
Again, South Africa takes the lead when it comes to what this type of ‘white collar’ crime costs corporates. While more than half of the global organisations surveyed reported loses of less than $100 000 to economic crime over the last 24 months, only 43% of South African organisations could make that claim.
Almost a fifth of local respondents experienced losses of between $100 000 and $1 million, and one in four respondents indicated having suffered losses of more than $1 million.
The survey also shows that cybercrime is a growing threat to companies across the world, with incidents reported up 23% when compared to the previous survey. More than half of organisations (57%) predict they will experience cybercrime in the next 24 months.
In South Africa, cybercrime has risen to the fourth most reported type of economic crime (up two places from 2014), with 32% of organisations affected, on par with the global average.
Most companies are still not adequately prepared for, or even understand the risks faced, with only 35% of organisations reporting they have a fully operational cyber incident response plan in place.
While there has been increased detection of economic crime through whistleblowing hotlines, far too much, is being left to chance by organisations – economic crimes discovered by accident more than doubled from 6% in 2014 to 14% in 2016. Another 8% of survey respondents explain how serious economic crimes against their organisations were detected.
“With a greater focus in recent years on the responsibility of management and boards insofar as good corporate governance practices are concerned, ignorance of matters affecting your company, and in particular a passive approach to detecting and preventing economic crime – is an open invitation for disaster, not only from a corporate perspective but on a personal level as well,” says Trevor White, partner, Forensic Services and Global Survey Leader, PwC.
The 2016 Global Economic Crime Survey interviewed 6,337 participants in 115 countries. In South Africa, 232 organisations from a broad spectrum of industries took part in the survey. The main aim of the survey is to inform South African business leaders about developments in the continuously changing landscape of economic crime in the country and to encourage debate around strategic and emerging issues in this sphere.
