Economic crime is up in Canada and detection is down according to PwC Canada’s 2016 Global Economic Crime Survey

• Concerns over cybercrime reach highest level in six years
• Employee morale suffers greatest organizational damage as a result of economic crime
• One in four Canadian organizations surveyed have not performed a fraud risk assessment in the past 24 months

Toronto, ON – February 25, 2016 – According to PwC’s Global Economic Crime Survey 2016, 37% of Canadian organizations (vs 36% globally) were victims of economic crime in the last two years. Asset misappropriation was the most common type of fraud in Canada and globally, increasing domestically to 62% from 58% in 2014.

Of Canadian organizations surveyed, 48% reported having lost less than $100,000 (USD) in the last 24 months, and 41% of respondents experienced losses of between $100,000 and under $5 million. One in four (26%) had not carried out a single fraud risk assessment in the last 24 months.

“Economic crime is still pervasive in Canada as it continues to find new ways to infiltrate all types of businesses. Defensive measures should be part of any organization’s strategy and culture, not just the responsibility of one person or team,” said Lori-Ann Beausoleil, national leader, Forensic Services, PwC Canada. “Despite many organizations implementing policies, procedures and controls, the increasingly complicated threat landscape challenges how businesses are balancing growth, risk management and resources.”

Some other notable findings from this year’s Canadian report include:

Most common economic crimes: Asset misappropriation (62%); cybercrime (28%); procurement fraud (21%); human resources fraud (13%); mortgage fraud (11%); and bribery and corruption (11%).

Industries at risk: Globally, Financial Services is traditionally most susceptible to economic crime as well as the Energy, Utilities and Mining industries. In both cases, increased regulations in response to economic crime is needed.

Cybercrime: 59% of Canadian respondents believe that cybercrime is on the rise, compared to 47% in 2014.

The fraudster profile: Nearly half the serious incidents of economic crimes were carried out by perpetrators employed by the affected organization. Internal fraudsters are most likely to be male graduates, with three-five years of service, aged between 31 and40 years old, and serving a middle/senior management function. When it comes to external fraudsters, 19% of organizations don’t know who the main perpetrator is.

Drivers of crime: Seven out of ten organizations believe that opportunity is the main driver of economic crime committed by internal parties.

What’s next? Within two years, six of the G20 (UK, USA, Italy, France, Canada and Australia) expect cybercrime to be the largest economic crime threat to their organization.                                 

As noted in PwC’s 2016 Canadian CEO Survey, more than three-quarters (76%) of chief executives agreed that there are more threats to their business than ever before, a sharp increase compared to the 2015 rate of 66%. There is a worrying trend that too much is being left to chance and not enough is being done from a proactive stand-point. Today more than ever before, a passive approach to economic crime can have significant consequences.

Employees are key to an organization’s successful fight against economic crime, internally and externally. According to the report, 41% of Canadian respondents indicated a medium to high impact to employee morale when assessing organizational damage due to economic crime. Embedding compliance within the company’s culture and values is essential. 

PwC Canada will launch supplements in the coming months that focus on topics including cybercrime and more.

To explore the Canadian insights emerging from this year’s survey please visit: www.pwc.com/ca/crimesurvey. 

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