While the reported incidences of fraud have decreased since 2009, organizations are taking a backseat when it comes to dealing
with new and emerging threats like cybercrime
TORONTO, Nov. 29, 2011 /CNW/ - The perceived risk of cybercrime to
Canadian organizations is on the rise according to a new report on
economic crime from PwC. The 2011 Global Economic Crime Survey ranks cybercrime as one of the top four economic crimes (23%), slightly
behind accounting fraud and bribery and corruption (24%). Asset
misappropriation (or theft) is the top crime, reported by 72% of
organizations around the world who were victims of economic crime in
the past year.
Overall 32% of the Canadian respondents from business and government
said they were victims of some form of economic crime during the past
12 months, a decrease of 24% from PwC's 2009 survey. "Canada has
historically reported higher instances of white-collar crime than our
global counterparts but the 2011 results show that we are now reporting
fewer instances," says Steven Henderson, National Forensic Services Leader at PwC.
He continues, "This could be for a few reasons: better diligence in
implementing anti-fraud regimes within companies, the effects of the
Canadian economy being stronger over the past two years than other
countries resulting in an environment with less visibility of fraud
which normally arises during a downturn, or the fact that crimes like
cybercrime or collusion between parties are still being committed but
are inherently more difficult to detect."
When it comes to cybercrime, 38% of Canadian respondents believe their
perception of its risks has increased and the majority (57%) believe
the greatest threats are coming from outside of their organizations -
from external sources residing within Canada and abroad. Globally, the
following alphabetically ordered countries are reported as the top 5
most likely places that cybercrime originates from:
Hong Kong and China
"Cybercrime is global in nature and traditional geographic borders do
not provide protection," says Henderson. "Organizations should have a
clear understanding of current and emerging cybercrime threats, and
management needs to understand the risks and opportunities that are
inherent in a cyber world."
However, while companies may recognize the significance of protecting
and investigating cybercrime incidents, only 36% of the Canadian
respondents said they have in-house capabilities to investigate
cybercrime and less than half have access to forensic technology
investigators who can create effective response mechanisms and
policies. In addition, nearly half of the Canadian organizations
reported that they had not received cyber security related awareness
training in the past year. Only 21% said that senior executives review
the risks that cybercrime presents on an annual basis, further
supporting the more "reactive culture" to crime prevention found in the
Who's committing white collar crimes?
More traditional types of fraud such as theft are most often being
committed within the company, by employees (56%), while external
fraudsters were the main perpetrator 40% of the time, according to
The typical internal fraudster was profiled to be male (77%), between
the ages of 31 and 40 years old (43%), a first degree graduate (37%)
and had been employed with the organization between three and five
years (30%). In addition, 39% of the perpetrators were classified as
junior staff, 41% as middle management and 18% as senior management.
"Crimes by senior management tend to be more sophisticated, larger in
dollar value and more difficult to detect," says Henderson. "This could
be a factor in why frauds committed by senior management were not
identified nearly as often as those committed by more junior staff."
When employees have been identified as committing economic crimes, they
are most often dismissed from their jobs (77%). Forty-four percent of
the time law enforcement is involved and in 40% of the incidents, civil
action is taken.
Henderson concludes, "When senior management takes an active interest in
fraud within their organization and takes strong disciplinary action
towards the perpetrators, the right 'tone at the top' is established. A
corporate culture that clearly stresses the importance of integrity,
where executives are seen as "walking the talk" and that has a well
communicated and comprehensive anti-fraud regime, is less likely to be
victimized by economic crime."
Methodology PwC's Global Economic Crime Survey 2011 continues to provide insight into the state of economic crime
worldwide. The 2011 survey was completed by 3,877 respondents from 78
countries. Of the total number of respondents, 52% were senior
executives, 36% represented listed companies and 38% represented
organizations with more than 1,000 employees.
This year's Canadian report is divided into two sections (1) Cybercrime
- awareness of the crime, how it impacts organizations, and what
actions are taken to address risks; and (2) Fraud, the fraudster and
the defrauded - the types of fraud committed, who is committing them,
how they are detected and actions taken by organizations in response.
For more information, please visit: www.pwc.com/ca/crimesurvey. The full report including graphs and charts is available from the
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