Survey shows extent of economic crime

A third of regional respondents in KPMG’s Global Economic Crime Survey said that they expected to experience bribery or corruption in the coming two years. According to the survey, the four most reported economic crimes in the Middle East were asset misappropriation (61 per cent), cybercrime (30 per cent), bribery and corruption (24 per cent), […]

A third of regional respondents in KPMG’s Global Economic Crime Survey said that they expected to experience bribery or corruption in the coming two years.

According to the survey, the four most reported economic crimes in the Middle East were asset misappropriation (61 per cent), cybercrime (30 per cent), bribery and corruption (24 per cent), and procurement fraud (24 per cent). Some 290 Middle East entities took part in PwC’s survey.

“While bribery and corruption is a particular and persistent issue in the Middle East, progress is being made,” said Nick Robinson, Middle East forensic services leader for PwC.

“The ratings for Kuwait, Jordan and Saudi Arabia have all improved slightly in the Transparency International Corruption Perception Index.

“However, the ratings for Egypt, Libya, Morocco, Syria and Tunisia have fallen slightly.

“There is obviously a cultural distance between regions and countries where malfeasance is seen as common business practice.”

According to the report, in the Middle East 26 per cent of organisations reported economic crimes, lower than the global average of 36 per cent, although an increase of 5 per cent on 2014.

About 10 per cent of crimes were discovered through an internal audit against 5 per cent in 2014, however 17 per cent of reported cases were uncovered only by accident.

Cybercrime remained the second most reported economic crime in the Middle East but most companies are still not prepared or understand the risk.

PwC found that nearly one in 10 companies had lost between US$5 million and $100m because of economic crimes over the past two years.

“We have found the crimes haven’t changed, they have just moved to a different platform, usually involving technology,” said John Wilkinson, Middle East regional deals leader for PwC.

“Companies have to be better prepared because often the attacks are cross-border and are non-jurisdictional.”

He said that companies had to take responsibility themselves as laws change slowly, but technology changes daily.

“We found 25 per cent of firms in the Middle East have never performed a fraud risk assessment, leaving them wide open to crime.”

ascott@thenational.ae

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Source: Business

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