Types of economic crimes plaguing SA and the world
At PwC’s media briefing where they released the findings from the Global Economic Crime and Fraud Survey 2018, it was revealed that Economic crime continues to be the most pervasive crime impacting SA’s organisations.
The survey was presented to members of the media by Trevor White, Partner at Forensics Services PwC and Trevor Hills, lead partner for PwC’s Forensic Services Practice.
South African organisations continue to report the highest instances of economic crime in the world with economic crime reaching its highest level over the past decade.
We take a look at the types of economic crimes that are proving to be more prevalent across the world and in SA.
The PwC survey said that asset misappropriation continues to remain the most prevalent form of economic crime reported by 45% of respondents globally and 49% of South African respondents.
While the instances of reported cybercrime showed a small decrease in the South African context (29% in 2018 versus 32% in 2016), it retained its second place in the global rankings (31%) albeit at a lower rate of occurrence than 2016.
The different types of economic crime experienced. Image: Global Economic Crime and Fraud Survey 2018.
One of the new categories of economic crimes was that of “fraud committed by the consumer”.
It is the second most reported crime in South Africa at 42% and takes third place globally at 29%.
This was followed closely by procurement fraud (39% in South Africa versus 22% globally). This indicates that the entire supply chain in South Africa is fraught with criminality.
When combined with the high instances of bribery and corruption reported (affecting more than a third of organisations at 34%), the resultant erosion in value from the country’s gross domestic product (GDP) is startling.
The most disruptive economic crimes likely to take place over the next 2 years. Image: Global Economic Crime and Fraud Survey 2018.
Accounting fraud, which is usually perpetrated by senior management and results in the largest losses, increased from 20% to 22%.
The survey indicated that SA businesses continued to take measures to fight against economic crimes, with 44% (Africa: 41%) of respondents having increased their spend on combating fraud since 2016 and 46% plan to increase their spend over the next 24 months (Africa: 45%).
"It is positive to note that almost two-thirds (64%) of South African respondents monitor whistleblower lines as a means to ensure the effectiveness of their compliance and governance programmes (Africa: 51%). This represents a 9% increase since 2016. It is also reassuring that business leaders are taking an active interest in their governance responsibilities and are becoming more aware of, or rather want to be made aware of, the effects and issues that economic crime and fraud have on their organisations. 95% of South African respondents (versus 91% of Global and 94% of African) said that the most disruptive incidents of economic crime were brought to the attention of the board executives or governance leaders within their organisations," the survey further read.
WATCH:
PwC said that respondents are also using technologies like artificial intelligence (AI) and advanced analytics as part of their efforts to combat and monitor fraud. The survey shows that companies in emerging markets, including South Africa, are currently investing in advanced technologies at a faster rate than their counterparts in developed nations.
Trevor Hills, Forensic Services Leader for PwC Southern Africa, said, “Technology is clearly a fundamental tool in the fight against fraud, but it’s not the only one. Ultimately, when it comes to blocking that ‘last mile’ to fraud, the returns from investment on people initiatives are likely to far exceed those from investing in another piece of technology. Focusing on human behaviour offers the best opportunity for reducing or preventing fraud, because ultimately, machines don’t commit fraud, people do –they just happen to be using technology more and more in these endeavors.”
- BUSINESS REPORT ONLINE
News Category
- International retailers
- On the move
- Awards and achievements
- Legislation
- Wine and liquor
- Africa
- Going green
- Supplier news
- Research tools
- Retailer trading results
- Supply chain
- Innovation and technology
- Economic factors
- Crime and security
- Store Openings
- Marketing and Promotions
- Social Responsibility
- Brand Press Office
Good signs for petrol prices in South Africa
By: Hanno Labuschagne - MyBroadband
An anticipated strengthening of the rand and slipping global oil prices could result in lower petrol prices at the pumps next month.
Eskom wants to hike electricity prices by up to...
By: Myles Illidge - MyBroadband
Eskom has asked the National Energy Regulator of South Africa (Nersa) for a 36.15% electricity tariff hike for the customers it directly supplies and charges, Daily Maverick reports.
Big petrol price drop tipped for July
By: Yogashen Pillay – The Mercury
Economists are predicting a big drop in petrol and diesel prices next month, saying it will bring much-needed relief to under-pressure consumers.
Fuel price cuts bigger than expected
By: Jason Woosey - IOL
Petrol and diesel prices are set to come down from Wednesday, June 5, according to a statement released by the Department of Mineral Resources and Energy (DMRE).
‘Desperation is the new normal’ for South Afric...
By: Opinion – IOL Business Report
South Africans have been collectively waiting with bated breath for some small financial reprieve from the relentless price hikes of the past few years that have driven them to the brink of despair, chief among t...