Dubai , United Arab Emirates – 30th January 2012 – 28% of businesses and other organisations in the Middle East reported economic crime in the last 12 months, according to PwC's Middle East Economic Crime Survey, released today at the 3rd Anti Corruption Summit in Abu Dhabi.
The top four types of economic crime cited were asset misappropriation, bribery and corruption, cybercrime and accounting fraud.
39 % of respondents in the Middle East projected that their organisations are likely to face bribery and corruption in the next 12 months, a rate that is much higher than the global average of 23%.
Furthermore, the survey reveals that fraud detection mechanisms in the Middle East are not as robust and 2 in 5 respondents reported that their organisations have not performed a fraud risk assessment in the last 12 months.
69% of respondents indicated that most serious fraud incidents were committed by internal perpetrators, who are typically profiled as male, between 31 and 40 years old, a graduate degree holder and has been with the company for three to five years.
Though the direct cost of economic crime to an organisation can be difficult to gauge, almost half of Middle East respondents reported that incidents of fraud cost their organisations between US$ 100,001 and US$ 5 million in the last 12 months. Victims of economic crime also reported significant collateral damage due to fraud including significant negative effect on their reputation and brand (26 %), employees’ morale (23 %), their business relations (20 %) and their organisation’s share price (6 %).
Commenting on the findings Tareq Haddad, PwC Middle East Forensic Services Partner said “It is possible that more organisations in the Middle East suffer from economic crime but lack the robust detection mechanisms that would allow for accurate reporting. This is evident by the results of the survey that showed that 17 % of known fraud was detected by accident compared to the global average of 8%. This emphasises the need for more robust fraud detection and investigation mechanisms in organisations in the Middle East.”
The survey was based on a series of interviews with C-suite executives, senior vice presidents and heads of departments across Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, United Arab Emirates and the West Bank Region. 26 % of the respondents represented listed companies, 25 % represented government/ state owned enterprises and 42 % represented organisations with more than 1,000 employees.
Notes to Editors:
About the survey
The 2011 Global Economic Crime Survey: Middle East Report was completed by 126 respondents. Of the total number of respondents, 37% were senior vice presidents and heads of units/ departments in their respective organisations, 42% were C-Suite executives, 26% represented listed companies and 42% represented organisations with more than 1,000 employees.
We conducted a survey of executives in organisations in the Middle East and Globally. The findings in this survey come from executives reporting their experiences of economic crimes in their organisations. We obtained information from them on the different types of economic crime, their impact on the organisation (both the financial loss and any collateral damage), the perpetrators of these crimes, what action the organisation took and how they responded to the crime.
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