Economic crime: people, culture and controls

The 4th biennial Global Economic Crime Survey: Indian Summary

According to PwC Global Economic Crime Survey 2007 , Economic Crime continues to be pervasive threat for Indian Companies, with 35 % of the organisations reporting having experienced fraud in the past two years.

There is a significant decrease in reported incidents since the 2005 survey where 54% of the Indian organisations interviewed reported suffering from economic crime. This decrease may not necessarily mean that companies in India are more successful in combating fraud than their global counterparts. On the contrary, the decline in the number of reported incidents may perhaps be attributable to reasons such as higher tolerance for fraud and a general perception that certain types of fraud are ”inherent” or a necessary by-product of rapid growth and reluctance to report fraud in light of increased media coverage and scrutiny of recent corporate scandals.

The survey, entitled "Economic Crime: People, Culture and Controls," found that economic crime is all but universal, affecting companies of all sizes and in all industries.

Following are some of the other key findings:
  • The average direct financial loss to companies was INR 60 Million (US $ 1.5 million) during the period and average cost to manage economic crime in India INR 40 Million (US $ 1 Million) which close to double as compared to global and Asia Pacific average
  • Asset Misappropriation and Corruption & Bribery continued to be the most common type of fraud, reported by 20 percent in each type of those who said they had experienced economic crime.
  • In 42% cases of the reported incidences, the economic crime was perpetrated by the respondent’s own staff and in one third out of these cases holding position in senior management
  • A typical fraudster as per the survey was a male, graduate between 31-40 years of age
  • In 50 % of the cases the fraud was detected by chance.
The biennial survey covering 152 organisations in India and over 5,400 globally is the most comprehensive study of its kind, conducted in association with Germany’s Martin-Luther University, Halle-Wittenberg.