The 2009 economic crimes survey, carried out by PricewaterhouseCoopers (PwC), points out that risk of fraud increases during a downturn, with accounting malpractices taking the cake.
Also See Anatomy of Frauds (Graphics)
Faced with a slowdown, most companies tend to cut corners on control measures and are under pressure to meet tough financial targets. While the incidents of fraud may have declined this year compared with the last, the risk of fraud has certainly shot up, according to 26% of the respondents. Not surprisingly, because many companies typically let off internal perpetrators of an economic crime with just a warning or a transfer of duties.
Interestingly, it is difficult to quantify the financial costs of an economic crime as the company suffers damage not just monetarily, but also to its goodwill, both internally and externally. The survey, part of PwC’s report on global economic crimes, drew upon responses from 145 executives.
Graphics by Ahmed Raza Khan / Mint