Accounting fraud is major problem for companies
5 Jan 10
Middle managers who are defrauding employers to maintain their living standards are contributing to the fastest growing economic crime experienced by organisations in the UK and the world
That’s according to PricewaterhouseCoopers’ (PwC) Global Economic Crime Survey (GECS) of more than 3,000 senior representatives of organisations in 54 countries.
The GECS survey found almost half of organisations in the UK had experienced some form of economic crime in the last 12 months. Asset misappropriation (suffered by 77 per cent of organisations reporting economic crime), was the most common; followed by financial statement fraud (40 per cent). Reports of accounting fraud have more than tripled in the UK, rising steadily from just 11 per cent since the first edition of the report in 2003.
There is strong evidence that economic pressures are driving trends in financial statement fraud. In the UK, fear of losing jobs (46 per cent) is cited as the biggest contributing reason why fraud is committed, followed by targets being more difficult to attain (40 per cent).
The profile of the internal fraudster is changing. Some 47 per cent of all economic crimes in the UK were perpetrated by middle managers, as opposed to junior or senior staff, up from 32 per cent in 2007.
Richard Neave, director at PwC in Scotland, said: “The pressure for people to commit fraud in the workplace is increasingly likely to surface as economic conditions continue to tighten.”