We are pleased to present to you our second edition of the PwC Global Economic Crime Survey – Middle East Report. This survey provides the views of respondents from more than 230 organisations in nine Arab Countries making it one of the most comprehensive studies in the Middle East.
This report provides important insights into the trends of economic crime in the region. Economic crime is a risk that threatens economic development and impacts the welfare of peoples. Economic crime in the public sector impacts every aspect of daily life and hinders investment. It also threatens businesses by compromising their internal processes, eroding the integrity of employees, and tarnishing reputations that take long years to build.
Economic crime continues to be a major concern for organisations of all sizes, across all regions and in virtually every sector. 21 % of organisations in the Middle East reported suffering economic crime compared to 37% globally.
Asset misappropriation remains the most commonly reported type of economic crime followed by cybercrime and bribery & corruption.
More than half of the respondents believe that bribery & corruption is a significant risk to their organisation when doing business globally.
16% of economic crime in the Middle East is detected by chance, significantly above the global average of 7%, indicating a widespread lack of effective fraud detection methods in the Middle East.
Globally, internal audit teams are much more successful at detecting major frauds (12%) than in the Middle East (5%). This highlights the real need for organisations in this region to train their internal staff to be able to identify fraud red flags.
63% of fraud was perpetrated internally, while 27% is external. The majority of respondents indicated that `opportunity' was the biggest factor contributing to this.
12% of respondents said that the financial impact on their businesses was greater than USD 5 million in the last 24 months.
In 2011 the greatest perceived non-financial impact was on the reputation or brand of the organisation.
In 2014 respondents indicated that the greatest perceived impact was on employee morale.
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 organisations with more than 1,000 employees.
The 2014 Middle East Economic Crime Survey was completed by 232 respondents from nine countries in the region.