Improving Internal Controls and Corporate Culture are Crucial Strategies for Global Businesses Working in High Risk Markets
DETROIT, August 28, 2014 ― Economic crime in the automotive industry is on the rise with 28 percent of the automotive respondents reporting that their companies experienced an incident of economic crime, up slightly from 25 percent in 2011. Among the top types of economic crime in the automotive sector, 74 percent are committed by internal perpetrators, making it the industry with the highest rate of insider crime. Most internal perpetrators were either senior executives (23%) or middle managers (54%).
Top types of economic crime in the automotive sector include:
“Economic crime results in significant revenue lost as well as impacting employee morale,” said Ted Hawkins, partner, PwC US Forensic Services. “As the automotive industry continues to do business on a global basis, it becomes even more important to implement a fraud risk management strategy to fight against these types of crimes. When automotive companies invest in emerging markets, these types of crime-fighting tools can help to uncover so called kick-back schemes and unethical vendor selection.”
Survey results indicate that only about half (48%) of the automotive sector’s companies have conducted a fraud risk assessment at least annually over the past 24 months—and 27 percent haven’t completed one at all.
For more information about PwC’s Global Economic Crime study, visit www.pwc.com/auto or download PwC’s 365 app.
About PwC's Automotive Practice
PwC’s automotive management consulting practice is creating a competitive advantage for its clients by changing the way companies operate. PwC’s management consultants work with senior automotive executives to help develop and implement innovative operational strategies that deliver breakthrough results. The practice is a leader in operational strategy, supply chain, product development, strategic sourcing, and manufacturing. PwC has automotive resources in every automotive market around the world. For more information, visit www.pwc.com.
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