Press release

PwC’s Global Economic Crime Survey shows fraud reported by 21% of organisations in the Middle East compared to 37% globally

71% of reported crimes involve asset misappropriation
37% cybercrime
35% bribery and corruption

Dubai, UAE, 26 February 2014 – While the level of reported incidents of economic crime has increased globally to 37%, the Middle East has experienced a decrease. The level of reported incidents now stands at 21% according to PwC’s 2014 Middle East Economic Crime Survey, a decrease of 7 percentage points since 2011. However, when asked about the future trend of economic crime more than 38% of respondents in the Middle East indicated that they expect their organisations to suffer from economic crime over the next 24 months.  

On the launch of the survey John Wilkinson, PwC Partner and leader of PwC’s Middle East Forensic Services team said “Economic crime is a risk that threatens development at a national level. It impacts the welfare of people across the region and stifles economic growth. According to our 2014 findings only 5% of frauds were detected by internal audit, with 22% detected by tip-offs and 16% now detected by chance indicating a widespread lack of effective fraud detection methods in the Middle East.  We believe the shortfall in effective fraud prevention and detection leads to a substantial deficit in the knowledge of economic crimes actually being committed.”
John added “Economic crime in the region still continues to be a significant threat, affecting large and small organizations. Every industry or company in the region is susceptible to the impact of fraud.  Looking forward, CEOs and executive management tell us that they are significantly concerned about the risks of cybercrime and that bribery and corruption remains a pervasive threat.”

The direct financial impact on businesses due to these crimes remains relatively high with 12% of respondents reporting a financial impact  greater than USD5 million over the past 2 years, half of which reported losses above USD100 million. Respondents also reported a significant non-financial impact on businesses: 41% now consider damage to employee morale the most significant collateral impact rather than the more commercial factors, such as business relationships or reputation, previously considered most important.

What types of economic crime have been reported?

The results of the survey identified that 21% of respondents had suffered at least one instance of economic crime in their organisations. This rate of reported incidents is lower in the Middle East than anywhere else in the world, however, the variety of crime suffered by those who did experience it in some form is consistently more varied than the global picture.

Tareq Haddad, PwC Partner and Middle East Investigations leader explained “the inherent nature of economic crime suggests that there will always be a level of fraud that will remain undetected. One has to consider the effectiveness of fraud detection measures in the Middle East and their maturity when considering the low level of reported incidents of 21%.”

It is worth mentioning that several Arab Countries in the Middle East are perceived to have high levels of corruption according to Transparency International’s Corruption Perceptions Index.

The survey showed that the most common type of economic crime reported in the Middle East is asset misappropriation, suffered by 71% of respondents who reported some form of fraud, followed by cybercrime (37%), bribery & corruption (35%) and accounting fraud (35%).

The extent of reported cybercrime reflects how constantly evolving technologies are creating more opportunities for technologically sophisticated criminals.
Out of the respondents that reported economic crime in their organisations 35% had experienced corruption at some point in the survey period, making it the third most common crime suffered. This rate is significantly higher than the global rate of 27%.While bribery and corruption was not the most common form of crime reported, of all the types of fraud covered in the survey it may pose the greatest threat to business both in the Middle East and globally. Cases of bribery and corruption reaching headline news indicate that the financial costs and collateral damage caused by incidences of bribery and corruption can be the most significant amongst the different types of economic crime.

When asked if organisations had been asked to pay a bribe, nearly one fifth answered positively and nearly one quarter felt their organisation has lost an opportunity due to a competitor paying a bribe. About 31% of respondents did not know if their organisation had paid any bribes to secure business and 42% did not know if their organisation lost opportunities to competitors who may have paid a bribe.

Tareq Haddad also added “we are seeing increasing awareness within boards of directors and audit committees about their responsibility to deal with the issues of bribery and corruption including, amongst other things, launching objective and independent investigations as required. In our opinion, boards of directors and audit committees are exposed to various risks if they do not show enough ownership in dealing with the issues arising out of incidents of economic crime.”

In our 2014 survey accounting fraud, unlike any other type of reported economic crime, has increased compared to the results in 2011. On the increasing level of accounting fraud Tareq Haddad commented that “this could be a result of increasing pressure on management teams in the region to achieve ambitious financial and profitability targets”.

PwC’s Middle East Economic Crime Survey, one of the most comprehensive on the subject in the region, also reported significant levels of other crimes including procurement fraud, human resources fraud and money laundering.

How is Fraud Found?

The survey found that corporate controls such as internal audit, data analytics, focused fraud risk management techniques and rotation of personnel were only responsible for detecting 16% of frauds, the same proportion as was detected by chance. Suspicious transaction reporting mechanisms, principally those used in the financial services sector, were responsible for detecting 26% of cases.

Whistleblowing mechanisms, whilst responsible for the detection of only 8% of major frauds were nonetheless widely used and highly valued. Over 50% of Middle East respondents indicated that they had whistleblowing mechanisms in place and 56% said they were effective or very effective, higher than the global average.

Fraud Prevention

The survey also showed that fraud risk assessments were not widely conducted by organisations in the Middle East. Only two out of five respondents indicated that such an assessment was conducted at least annually.

“In our view a failure to accurately assess the specific fraud risks an organisation faces leads to a failure to design effective internal controls to target those risks” commented Tania Fabiani, PwC’s Middle East Fraud Risk and Integrity Leader.

Who Commits Fraud

According to the survey, 63% of economic crime is committed by someone inside the company, with the majority of respondents indicating that ‘opportunity’ was the biggest factor contributing to this. Whilst survey respondents indicated that on average 27% of perpetrators were external to the business there were exceptions at an industry level: 60% of perpetrators in the financial services industry were external to the organisation.

Significantly the profile of the typical internal fraudster has changed since the 2011 survey: although still male and educated to degree level they are now most likely to be in a senior management role and aged between 41-50, as opposed to middle management staff aged 31-40, as was the case previously. They are likely to have had a tenure of more than 10 years in the organization.

About the survey

The 2014 Global Economic Crime Survey was completed by 5,128 respondents from 95 countries between August 2013 and February 2014.   Of the respondents, 50% were senior executives, 35% represented publicly listed companies, and 54% were from organizations with more than 1,000 employees.
The 2014 Middle East Economic Survey was completed by 232 respondents from nine Arab countries in the region. Comparative indicators for respondents in the Middle East are provided below.

Job titles of participants


% respondents



Chief Financial Officer/Treasurer/Controller


Head of Department


Chief Executive Officer/President/Managing Director


Senior Vice President/Vice President/Director


Other C-level Executive


Head of Business Unit


Board Member


Chief Security Officer


Don't know




Function (main responsibility) of participants in the organisations


% respondents





Executive management






Marketing and sales


Other (please specify)


Risk management


Information technology




Operations and production




Customer service


Human resources


Research and development


Participating organisation types


% respondents



Listed on a stock exchange