Global Economic Crime Survey, 2014: Key Highlights from the U.S.

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Didier Lavion
Principal, Forensic Services
Tel: +1 (646) 471-8440

Steven Skalak
Partner, US
Tel: +1 (646) 471-5950

Economic crime continues to remain in the forefront of corporate concern, posing a threat to fundamental business processes.

  • 45% of organizations in the U.S. suffered from some type of fraud in the past two years, more than the global average of 37%.
  • More than half of U.S. organizations that experienced fraud in the last two years reported an increase in the number of occurrences.
  • 67% of U.S. respondents indicated their organizations currently have or planned to have operations in high-risk markets, compared to only 58% of global respondents.
  • 57% of U.S. respondents indicated their organizations pursued opportunities in markets with high-levels of corruption risk within the past 24 months, versus 38% of global respondents.

Frauds on the Rebound

  • 24% of U.S. organizations that reported economic crime experienced accounting fraud in 2009. In 2011, this dropped to 16%. In 2014, accounting fraud increased back to 23%.
  • In 2014, bribery & corruption at 14% doubled from 2011 levels (7%), after dropping by more than a half since 2009 (16%).

Profiling the Perp

  • The external perpetrator of fraud is closing the gap on the internal perpetrator of fraud, with U.S. organizations reporting that economic crime is committed by external actors (45% of the time) almost as often as it’s committed by internal actors (50% of the time).
  • Most internal frauds are now perpetrated by middle management:
    • 54% of internal frauds were committed by middle management
  • There’s been a rise in the number of frauds committed by middle management:
    • 45% in 2011 v. 54% in 2014
  • There’s been a drop in the number of frauds committed by junior staff:
    • 50% in 2011 v. 31% in 2014

Detecting Fraud

  • Fraud at U.S. organizations initially detected by external measures or by accident in 2014 more than doubled from 2011 levels:
    • 32% in 2014 v. 15% in 2011
  • Fraud at U.S. organizations was initially detected through external tip-offs more often than any other method.
  • Fraud at U.S. organizations initially detected by suspicious transaction reporting plummeted by 19%:
    • 11% in 2014 v. 30% in 2011

Blowing the Whistle on Fraud

  • 86% of U.S. organizations have a whistleblower mechanism, compared to only 62% of global organizations.
  • 83% of U.S. respondents that have whistleblower mechanisms believed they were effective.

Cybercrime is here to Stay

  • 44% of U.S. organizations that experienced fraud in the past 24 months suffered from cybercrime; and 44% of all U.S. respondents indicated they thought it was likely their organization would suffer from cybercrime within the next 24 months.
  • US respondents’ perception of the risks of cybercrime exceeded the global average by 23%:
    • 71% of U.S. respondents perceived an increased risk of cybercrime over the past 24 months versus 48% of Global respondents