The Global Economic Crime Survey Economic crime in a downturn November 2009
Nov 17, 2014
The G
lob
al E
co
no
mic
Crim
e S
urv
ey
Eco
no
mic
crim
e in
a d
ow
ntu
rnN
ove
mb
er
2009
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
2
We a
re p
lease
d t
o p
rese
nt
our
fift
h G
lob
al E
co
no
mic
Crim
e S
urv
ey.
Our
2009 s
urv
ey
scru
tinis
ed
fr
aud
and
ass
ocia
ted
inte
grity
ris
ks
during
a p
erio
d in
whic
h m
ost
terr
ito
ries
aro
und
the w
orld
exp
erienced
either
a d
ram
atic e
co
no
mic
do
wntu
rn o
r at
least
a s
ignifi
cant
slo
wd
ow
n. A
gain
st t
his
b
ackd
rop
, th
e s
urv
ey
inve
stig
ate
d t
he r
oo
t cause
s o
f eco
no
mic
crim
e, and
the w
ay
in w
hic
h it
aff
ects
busi
ness
es
wo
rld
wid
e.
Eco
no
mic
crim
e is
a t
ruly
glo
bal p
heno
meno
n. O
ver
3,0
00 s
enio
r re
pre
senta
tive
s o
f o
rganis
atio
ns
in
54 c
ountr
ies
(inclu
din
g r
esp
ond
ents
sp
read
fro
m A
ust
ralia
to
Venezu
ela
) co
mp
lete
d o
ur
web
-base
d
surv
ey.
To
enab
le u
s to
dete
rmin
e lo
ng
-term
tre
nd
s, r
esp
ond
ents
were
ask
ed
a n
um
ber
of
‘co
re’
quest
ions
on fra
ud
. T
hey
were
als
o a
sked
a n
um
ber
of o
ther
quest
ions
specifi
cally
on t
he fra
ud
thre
ats
th
at
em
erg
e in
an e
co
no
mic
do
wntu
rn. W
ith 6
2%
of
resp
ond
ents
rep
ort
ing
that
their o
rganis
atio
ns
had
suff
ere
d a
declin
e in
reve
nues
during
the la
st 1
2 m
onth
s, w
e w
ere
ab
le t
o o
bta
in s
om
e v
alu
ab
le
insi
ghts
into
the t
ypes
and
cause
s o
f fr
aud
in a
n e
co
no
mic
do
wntu
rn. F
urt
her
deta
ils o
f th
e s
urv
ey
dem
og
rap
hic
s are
pre
sente
d in
the ‘m
eth
od
olo
gy
and
ackno
wle
dg
em
ents
’ se
ctio
n o
f th
is r
ep
ort
.
Intr
od
uctio
n
qu
itp
rin
tE
co
no
mic
cri
me
th
rivin
g
in t
he
do
wn
turn
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
In
tro
du
cti
on
Co
ntin
ued
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
3
mo
re in
centive
s fo
r fr
aud
s, a
nd
g
enera
ting
mo
re o
pp
ort
unitie
s fo
r fr
aud
sters
to
perp
etr
ate
their c
rim
e.
In t
his
clim
ate
, w
e a
re c
ontinuin
g
to d
eve
lop
our
kno
wle
dg
e a
nd
und
ers
tand
ing
of
fraud
and
its
perp
etr
ato
rs. W
ith t
his
insi
ght,
we a
re
ab
le to recom
mend
what org
anis
atio
ns
can d
o w
hen it
co
mes
to t
acklin
g
fraud
. W
e a
re v
ery
gra
tefu
l to
all
the
resp
ond
ents
and
org
anis
atio
ns
that
part
icip
ate
d in
the s
urv
ey,
witho
ut
who
m w
e w
ould
no
t have
been a
ble
to
pro
duce t
his
rep
ort
. C
rucia
lly,
we
ho
pe t
hat
our
find
ing
s w
ill f
urt
her
ass
ist
read
ers
in t
heir o
ng
oin
g fi
ght
ag
ain
st e
co
no
mic
crim
e.
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
Le
ad
ers
hip
Te
am
:
To
ny P
art
on
P
art
ner, L
ond
on,
United
Kin
gd
om
Vid
ya
Ra
jara
o
Part
ner, M
um
bai,
Ind
ia
Ste
ve
n S
ka
lak
P
art
ner, N
ew
Yo
rk,
US
A
No
vem
ber
2009
We h
ave
div
ided
the r
ep
ort
into
the
follo
win
g s
ectio
ns:
Fra
ud
th
rivin
g in
th
e d
ow
ntu
rn –
in
whic
h w
e o
utlin
e t
op
ical a
reas
o
f in
tere
st a
risi
ng
fro
m a
n e
co
no
mic
d
ow
ntu
rn a
nd
the h
eig
hte
ned
ris
k
of
fraud
, as
well
as
the k
ey
them
es
aris
ing fro
m the c
ore
surv
ey
quest
ions.
A d
eep
er
div
e in
to ‘th
e s
tati
sti
cs’
– w
here
we t
ake a
clo
ser
loo
k a
t th
e
statist
ics
and
at
trend
s re
late
d t
o
victim
s, t
ypes
and
perp
etr
ato
rs o
f fr
aud
, th
e u
nd
erlyi
ng
cause
s and
fa
cto
rs b
ehin
d f
raud
and
the im
pact
on m
anag
em
ent
and
reg
ula
tory
b
od
ies.
This
sectio
n a
lso
hig
hlig
hts
d
iffere
nces
in r
esu
lts
rep
ort
ed
by
resp
ond
ents
acro
ss t
he w
orld
.
Th
e f
rau
d h
ori
zo
n –
here
we id
entify
fr
aud
tre
nd
s in
the f
utu
re,
as
well
as
what
org
anis
atio
ns
may
be a
ble
to
d
o t
o c
om
bat
them
.
Our
surv
ey
sho
ws
that
eco
no
mic
crim
e c
ontinues
to b
e a
serio
us
issu
e
aff
ecting
org
anis
atio
ns
wo
rld
wid
e,
desp
ite in
cre
asi
ng
reg
ula
tory
actio
ns.
T
his
is p
art
icula
rly
so t
od
ay,
in a
n
envi
ronm
ent
where
the g
lob
al
eco
no
mic
do
wntu
rn h
as
sig
nifi
cantly
incre
ase
d p
ress
ure
s o
n o
rganis
atio
ns
and
ind
ivid
uals
to
perf
orm
, cre
ating
the r
esp
ond
ents
to
ob
tain
in
form
atio
n o
n t
he d
iffere
nt
typ
es
o
f eco
no
mic
crim
e, th
e im
pact
o
f su
ch e
co
no
mic
crim
e, b
oth
financia
l and
in t
erm
s o
f co
llate
ral
dam
ag
e, and
the c
oncre
te c
ause
s o
f eco
no
mic
crim
e, as
well
as
the
rang
e o
f re
med
ial a
ctio
ns
taken.
2.
Qu
esti
on
s r
ela
ted
to
fra
ud
in
a d
ow
ntu
rn.
Our
surv
ey
giv
es
in
-dep
th in
sig
hts
into
fra
ud
faced
b
y o
rganis
atio
ns
in t
imes
of
eco
no
mic
do
wntu
rn. O
ur
focuse
d
inve
stig
atio
n in
to t
his
are
a h
as
enab
led
us
to u
nd
ers
tand
the
imp
act
the d
ow
ntu
rn h
as
had
o
n le
vels
, ty
pes
and
cause
s o
f eco
no
mic
crim
e.
3.
An
aly
sis
of
tren
ds o
ver
tim
e.
Sin
ce b
eg
innin
g t
hese
surv
eys
,
we h
ave
co
ntinued
to
ask
a c
ore
g
roup
of
quest
ions,
and
ad
ditio
nal
quest
ions
as
ap
pro
priate
to
re
flect
curr
ent
issu
es
likely
to
be
imp
acting
busi
ness
es
aro
und
the
wo
rld
. B
ecause
our
data
no
w
enco
mp
ass
es
a 1
0-y
ear
perio
d,
we a
re e
quip
ped
to
identify
and
ass
ess
long
-term
deve
lop
ments
and
tre
nd
s in
the fi
ght
ag
ain
st
eco
no
mic
crim
e.
We a
re p
art
icula
rly
gra
tefu
l fo
r th
e
ass
ista
nce o
f th
e IN
SE
AD
busi
ness
sc
ho
ol w
ith t
he s
co
pe, co
nte
nt
and
su
bse
quent
inte
rpre
tatio
n o
f th
e
surv
ey
data
. T
heir in
volv
em
ent
has
ad
ded
an e
xtr
a d
imensi
on t
o t
he
surv
ey,
bring
ing
sig
nifi
cant
valu
e
to t
his
year’s
rep
ort
. W
e w
ould
like
to t
ake t
his
op
po
rtunity
to t
hank
Pro
fess
or
Do
ug
las
Fra
nk o
f IN
SE
AD
b
usi
ness
scho
ol f
or
his
insi
ghts
and
co
ntr
ibutio
n t
o t
he s
urv
ey.
The a
im o
f th
e 2
009 s
urv
ey
was
prim
arily
to
:
Ass
ess
co
rpo
rate
att
itud
es
tow
ard
s eco
no
mic
crim
e in
the c
urr
ent
eco
no
mic
envi
ronm
ent,
part
icula
rly
to u
nd
ers
tand
ho
w e
co
no
mic
crim
e c
hang
es
during
an e
co
no
mic
d
ow
ntu
rn; and
Und
ers
tand
and
exp
lore
the t
rend
s in
rela
tio
n t
o e
co
no
mic
crim
e a
nd
th
e r
easo
ns
why
these
mig
ht
arise
.
The 2
009 s
urv
ey
was
base
d o
n t
he
follo
win
g r
ese
arc
h s
trate
gie
s:
1. S
urv
ey o
f o
rgan
isati
on
execu
tives.
This
surv
ey
deliv
ers
find
ing
s in
w
hic
h e
xecutive
s re
po
rt t
heir o
wn
exp
eriences
in t
he fi
ght
ag
ain
st
eco
no
mic
crim
e. W
e s
urv
eye
d
qu
itE
co
no
mic
cri
me
th
rivin
g
in t
he
do
wn
turn
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
In
tro
du
cti
on
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
4
had
declin
ed
. W
e a
lso e
xpecte
d that
resp
ond
ents
rep
ort
ing a
sta
ble
leve
l of fin
ancia
l perf
orm
ance w
ould
have
re
port
ed
few
er
fraud
s, b
ut th
ey
rep
ort
th
e s
am
e f
req
uency
of
incid
ents
as
the 6
2%
of
resp
ond
ents
rep
ort
ing
a
declin
e.
This
dem
onst
rate
s th
at
all
org
anis
atio
ns,
wheth
er
or
no
t su
ffering
a d
eclin
e in
financia
l p
erf
orm
ance in
a d
ow
ntu
rn,
are
at
risk
of
eco
no
mic
crim
e.
Hence,
we
co
nclu
de t
hat
eco
no
mic
crim
e
rem
ain
s a p
erv
asi
ve b
usi
ness
ris
k,
whic
h d
oes
no
t d
iscrim
inate
am
ong
(43%
and
42%
, re
spective
ly)
exp
erienced
in t
he p
ast
year
were
g
reate
r co
mp
are
d t
o 1
2 m
onth
s ag
o.
Giv
en t
he 4
0%
-60%
sp
lit in
vie
ws
as
to w
heth
er
the r
ecess
ion h
ad
in
cre
ase
d t
he r
isk o
r th
e in
cid
ence
of
eco
no
mic
crim
e, w
e e
xp
ecte
d t
hat
the 3
8%
of
org
anis
atio
ns
rep
ort
ing
no
imp
act
of
a d
ow
ntu
rn w
ould
have
b
ett
er, t
hat
is lo
wer
eco
no
mic
crim
e
exp
erience. W
e f
ound
, ho
weve
r, t
hat
org
anis
atio
ns
that
had
no
t su
ffere
d
fro
m a
n e
co
no
mic
do
wntu
rn r
ep
ort
ed
si
mila
r le
vels
of
eco
no
mic
crim
e a
s co
mp
are
d t
o t
ho
se w
ho
se b
usi
ness
es
Fra
ud
– p
erv
asi
ve, p
ers
iste
nt
and
pern
icio
us
One in
thre
e r
esp
ond
ents
rep
ort
ed
eco
no
mic
crim
es
in t
he la
st 1
2
mo
nth
s w
ithin
their o
rganis
atio
ns
in
the c
ountr
y in
whic
h t
hey
were
p
rim
arily
base
d. T
he s
urv
ey
data
sh
ow
s th
at th
e in
cid
ence o
f econom
ic
crim
e v
aries
by
terr
ito
ry; so
me
co
untr
ies,
main
ly t
ho
se in
em
erg
ing
m
ark
ets
, exp
erienced
much h
igher
leve
ls o
f fr
aud
than t
he a
vera
ge,
as
much a
s 71%
in o
ne c
ountr
y
(see t
ab
le u
nd
er
‘the g
lob
al p
ictu
re’
sectio
n); b
y in
dust
ry s
ecto
r, s
om
e
(no
tab
ly in
sura
nce, financia
l serv
ices
and
com
munic
atio
ns)
rep
ort
ing h
igher
leve
ls o
f fr
aud
than o
thers
; b
y si
ze
and
typ
e o
f o
rganis
atio
n. B
ut
no
o
rganis
atio
n is
imm
une.
Of
the 3
,037 r
esp
ond
ents
to
our
surv
ey
glo
bally
, 905 (30%
) re
po
rted
havi
ng
exp
erienced
at
least
one
incid
ent
of
fraud
in t
he la
st 1
2 m
onth
s alo
ne. N
ot
surp
risi
ng
ly, th
e g
lob
al
eco
no
mic
do
wntu
rn h
as
signifi
cantly
affecte
d m
ost
org
anis
atio
ns,
with 6
2%
o
f re
spo
nd
ents
havi
ng
rep
ort
ed
a
declin
e in
financia
l perf
orm
ance o
ver
the la
st 1
2 m
onth
s and
40%
of
all
resp
ond
ents
sayi
ng
that
the r
isk o
f eco
no
mic
crim
e h
ad
ris
en d
ue t
o
the r
ecess
ion. In
deed
, alm
ost
half
of our
resp
ond
ents
belie
ved
that
the
incid
ences
and
co
st o
f fr
aud
Eco
no
mic
crim
e
thrivi
ng
in t
he
do
wntu
rn
qu
itIn
tro
du
cti
on
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
‘the g
lob
al p
ictu
re’
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
5
Fig
ure
2: Facto
rs c
ontr
ibuting tow
ard
s in
cre
ased
incentives/p
ressure
s t
o c
om
mit f
raud
010
20
30
40
50
25
23
18
14
13
Fin
ancia
l ta
rgets
mo
red
ifficult t
o a
chie
ve
Fear
of
losin
g jo
bs
Desire t
o e
arn
pers
onal
perf
orm
ance b
onuses
Fo
r senio
r executives
to a
chie
ve d
esired
financia
l re
sults
Bo
nuses n
ot
paid
this
year
Main
tain
fin
ancia
l p
erf
orm
ance
to e
nsure
lend
ers
do
no
tcancel d
eb
t fa
cili
ties
Oth
er
facto
rs
There
is a
belie
f th
at
co
mp
etito
rs a
re p
ayin
g b
rib
es
to w
in c
ontr
acts
47
37
27
% Incentives/p
ressure
s
% r
espon
den
ts w
ho
bel
ieve
incr
ease
d in
centive
s/pre
ssure
s ar
e th
e m
ost
likel
y re
ason
for
gre
ater
ris
k of
eco
nom
ic c
rim
e in
a d
owntu
rn
Am
ong
the 4
0%
of
resp
ond
ents
who
belie
ved
that
there
is a
gre
ate
r risk
of
fraud
in t
he c
urr
ent
eco
no
mic
enviro
nm
ent,
18%
id
entified
incre
ased
op
po
rtunitie
s f
or
co
mm
itting
fra
ud
as
the r
oo
t cause (see fi
gure
1). In t
his
resp
ect,
‘S
taff
red
uctio
ns r
esultin
g in
few
er
reso
urc
es d
ep
loyed
on inte
rnal
co
ntr
ols
’ w
as id
entified
as t
he m
ain
co
ntr
ibuto
ry facto
r (6
2%
, see fi
gure
3).
Fin
ancia
l d
ifficultie
s in a
do
wntu
rn
when f
aced
with e
vid
ence o
f a
do
wntu
rn. O
ur
surv
ey h
ighlig
hte
d t
hat
no
ind
ustr
y o
r o
rganis
atio
n is im
mune
to f
raud
and
it
wo
uld
ap
pear
that
the
curr
ent
eco
no
mic
situatio
n is lead
ing
to s
evere
, o
ften c
ut-
thro
at
co
mp
etitio
n.
Ind
ivid
uals
feel und
er
pre
ssure
to
achie
ve t
arg
ets
when t
imes b
eco
me
difficult, o
r w
hen it
seem
s im
po
ssib
le
to a
chie
ve t
arg
ets
. F
urt
herm
ore
, an
ind
ivid
ual’s
pers
onal p
ositio
n m
ay
be t
hre
ate
ned
by r
ed
uctio
ns in p
ay
or
the r
isk o
f p
ossib
le u
nem
plo
ym
ent.
Conseq
uently,
the t
em
pta
tio
n t
o inflate
revenues, and
/or
om
it e
xp
enses,
is
mo
re lik
ely
to
overr
ule
eth
ical valu
es.
Our
surv
ey r
eveale
d t
hat
a k
ey f
acto
r
resultin
g in incre
ased
pre
ssure
to
co
mm
it f
raud
is jo
b s
ecurity
. O
f th
e
resp
ond
ents
who
belie
ved
that
und
erlyin
g p
ressure
s o
r in
centives
are
the m
ain
drivers
fo
r g
reate
r fr
aud
risk, 37%
rep
ort
ed
that
‘Peo
ple
are
afr
aid
they m
ight
lose t
heir jo
bs’
(see fi
gure
2). F
urt
herm
ore
, w
hen
em
plo
yees a
re t
erm
inate
d,
tho
se
who rem
ain
em
plo
yed
feel i
ncre
asin
gly
pre
ssure
d w
here
they f
eel th
at
their
ow
n jo
bs a
re u
nd
er
thre
at.
Em
plo
yee
term
inatio
n a
nd
ad
ditio
nal co
st
red
uction m
easure
s m
ay b
e in
evitab
le
in a
do
wntu
rn, b
ut
manag
em
ent
sho
uld
co
nsid
er
wheth
er
such
actio
ns c
ould
, in
turn
, co
mp
rom
ise
the o
rganis
atio
n’s
ab
ility
to
fig
ht
eco
no
mic
crim
e.
Fig
ure
1: F
raud
triang
le
Att
itud
e/
Ratio
nalis
atio
n
14%
!F
RA
UD
RIS
K
Incentive o
r P
ressure
68%
Op
po
rtunity
18%
Inte
resting
ly, am
ong
the r
esp
ond
ents
who
belie
ved
that
there
is a
gre
ate
r
risk o
f fr
aud
in t
he c
urr
ent
eco
no
mic
enviro
nm
ent,
tw
o-t
hird
s f
elt t
hat
incre
ased
incentives o
r p
ressure
s
are
the m
ost
likely
und
erlyin
g c
ause.
The m
ost
co
mm
only
rep
ort
ed
facto
r
co
ntr
ibuting
to
these incre
ased
pre
ssure
s a
nd
incentives w
as t
hat
‘financia
l ta
rgets
were
mo
re d
ifficult
to a
chie
ve’, c
overing
bo
th ind
ivid
ual
targ
ets
and
tho
se f
or
the b
usin
ess
as a
who
le.
Cle
arly,
in a
n e
co
no
mic
do
wntu
rn,
financia
l ta
rgets
are
mo
re d
ifficult t
o
achie
ve, and
are
oft
en o
ver
am
bitio
us.
Org
anis
atio
ns w
ould
there
fore
be w
ell
ad
vis
ed
to
be r
ealis
tic w
hen s
ett
ing
their t
arg
ets
, as w
ell
as b
ein
g m
ore
pre
pare
d t
o a
dju
st
targ
ets
do
wnw
ard
s
its v
ictim
s b
ased
on t
he r
ela
tive
deg
ree o
f th
eir fi
nancia
l p
erf
orm
ance.
Ho
wever, o
ur
surv
ey r
esults s
ho
w t
hat
tho
se o
rganis
atio
ns s
uff
ering
fro
m
a d
ow
ntu
rn r
ep
ort
ed
no
tab
ly h
igher
levels
of
one t
yp
e o
f eco
no
mic
crim
e,
that
is a
cco
unting
fra
ud
, w
hic
h w
e
ad
dre
ss late
r in
this
rep
ort
.
Fra
ud
pra
ctitio
ners
oft
en p
oin
t to
thre
e facto
rs t
hat
are
co
mm
only
fo
und
when fra
ud
occurs
(F
raud
Triang
le).
First,
perp
etr
ato
rs o
f fr
aud
need
an
incen
tive o
r p
ressure
to
eng
ag
e in
mis
co
nd
uct.
Seco
nd
, th
ere
need
s t
o
be a
n o
pp
ort
unity t
o c
om
mit f
raud
,
and
third
, p
erp
etr
ato
rs a
re o
ften a
ble
to r
atio
nalis
e o
r ju
stify
their a
ctio
ns.
Ou
r surv
ey p
rob
ed
deep
er
into
the
imp
act
of
these t
hre
e f
acto
rs a
nd
fou
nd
that
am
ong
the r
esp
ond
ents
wh
o b
elie
ved
that
there
is a
gre
ate
r
risk o
f fr
aud
in t
he c
urr
ent
eco
no
mic
enviro
nm
ent:
68%
att
rib
ute
d g
reate
r risk o
f fr
aud
to in
cre
ase
d ‘in
centive
s or p
ress
ure
s’;
18%
rep
ort
ed
that
‘mo
re
op
po
rtunitie
s’ to
co
mm
it f
raud
was
the m
ost
likely
reaso
n f
or
gre
ate
r
risk o
f fr
aud
; and
14%
belie
ved
that
peo
ple
’s ‘ab
ility
to r
atio
nalis
e’ w
as t
he m
ain
facto
r
co
ntr
ibuting
to
gre
ate
r risk o
f fr
aud
(see fi
gure
1).
qu
itIn
tro
du
cti
on
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
6
acco
unting
fra
ud
and
brib
ery
and
co
rrup
tio
n.
Fig
ure
5 s
ho
ws t
he t
rend
in t
hese t
hre
e m
ain
typ
es o
f fr
aud
rep
ort
ed
in o
ur
last
four
surv
eys.
Fig
ure
5: Tre
nd
s in r
ep
ort
ed
fra
ud
s
01
020
30
40
50
60
70
Asset
mis
ap
pro
priatio
n
Acco
unting
fra
ud
Brib
ery
and
co
rrup
tio
n
% C
om
panie
s
67 7
0
62
60
38
27
24
10
27
24
14
30
2009
2007
2005
2003
% r
espon
den
ts w
ho
exper
ience
d e
conom
ic c
rim
es
Two
-third
s o
f th
ose r
esp
ond
ents
who
have e
xp
erienced
eco
no
mic
crim
e in
the last
12 m
onth
s r
ep
ort
ed
havin
g
suff
ere
d a
sset
mis
ap
pro
priatio
n
(see fi
gure
5). T
his
typ
e o
f fr
aud
–
the m
ost
pre
vale
nt
sin
ce w
e b
eg
an
these s
urv
eys 1
0 y
ears
ag
o –
co
vers
a v
ariety
of
mis
dem
eano
urs
and
while
it
is t
he h
ard
est
to p
revent,
it is a
rguab
ly t
he e
asie
st
to d
ete
ct.
Sharp
ris
e in a
cco
unting
fra
ud
s
Eco
no
mic
crim
e t
akes o
n m
any
diffe
rent
form
s, so
me m
ore
co
mm
on
than o
thers
. F
igure
4 s
ho
ws t
he t
yp
es
of
eco
no
mic
crim
e s
uff
ere
d b
y t
ho
se
resp
ond
ents
who rep
ort
ed
exp
eriencin
g
eco
no
mic
crim
e in t
he last
12 m
onth
s.
Fig
ure
4:
Typ
es o
f eco
no
mic
crim
es
010
20
30
40
50
60
70
15
12
5 4 3 53
Asset
mis
ap
pro
priatio
n
Acco
unting
fra
ud
Brib
ery
and
co
rrup
tio
n
IP infr
ing
em
ent
Mo
ney laund
ering
Tax f
raud
Ille
gal in
sid
er
trad
ing
Mark
et
fraud
invo
lvin
g c
art
els
co
llud
ing
to
fix
prices
Esp
ionag
e
Oth
ers
67
38
27
% r
ep
ort
ed
fra
ud
s
% r
espo
nden
ts w
ho e
xper
ienc
ed e
cono
mic
crim
es in
the
last
12 m
onth
s
Fig
ure
4 s
ho
ws t
hat
the t
hre
e m
ost
co
mm
on t
yp
es o
f eco
no
mic
crim
es
exp
erienced
in t
he last
12 m
onth
s
were
asset
mis
ap
pro
priatio
n,
forc
e o
rganis
atio
ns t
o r
ed
uce c
osts
and
exp
lore
are
as w
here
effi
cie
ncie
s
can b
e g
enera
ted
. S
taff
red
uctio
ns
can r
esult in r
ed
uced
seg
reg
atio
n
of
duties a
nd
less m
onito
ring
of
susp
icio
us t
ransactio
ns a
nd
activitie
s.
This
, in
turn
, w
eakens t
he inte
rnal
co
ntr
ol enviro
nm
ent
and
is o
ften lik
ely
to r
esult in m
ore
op
po
rtunitie
s t
o
co
mm
it f
raud
.
Fig
ure
3: F
acto
rs c
ontr
ibuting
to
ward
s c
reating
mo
re o
pp
ort
unitie
s t
o c
om
mit f
raud
01
020
30
40
50
60
70
22
22
15
12
6
Sta
ff r
ed
uctio
ns r
esultin
g in
few
er
reso
urc
es b
ein
g d
ep
loyed
on inte
rnal co
ntr
ols
Shift
of
manag
em
ent'
s f
ocus
tow
ard
s s
urv
ival o
f b
usin
ess
Incre
ased
wo
rklo
ad
of
inte
rnal aud
it s
taff
Weakenin
g o
f IT
co
ntr
ols
resultin
gin
incre
ased
vuln
era
bili
ty o
fexte
rnal p
enetr
atio
n
Tra
nsfe
r o
f o
pera
tio
ns
to n
ew
terr
ito
ries
Div
ers
ific
atio
n o
fp
rod
uct
po
rtfo
lio
Red
uced
reg
ula
tory
overs
ight
Oth
er
facto
rs
% O
pp
ort
unitie
s
62
49
34
% r
espon
den
ts w
ho
bel
ieve
mor
e op
por
tunitie
s co
nst
itute
the
mos
t lik
ely
reas
on f
or g
reate
r ri
sk o
f ec
onom
ic c
rim
e in
a d
ow
ntu
rn
qu
itIn
tro
du
cti
on
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
7
resu
ltin
g in
incre
ase
d r
eg
ula
tory
enfo
rcem
ent.
Reg
ula
tors
are
takin
g
an in
cre
asi
ng
ly d
im v
iew
of
org
anis
atio
ns
and
ind
ivid
uals
that
have
paid
or
receiv
ed
brib
es
in o
rder
to s
ecure
co
ntr
acts
and
busi
ness
org
anis
atio
n u
ses
sale
s ag
ents
and
dis
trib
uto
rs, and
there
fore
co
ntr
ol
is r
ed
uced
.
In r
ecent
years
there
has
been a
se
a c
hang
e in
att
itud
es
tow
ard
s b
rib
ery
and
co
rrup
tio
n g
lob
ally
,
Glo
bally
, 27%
of
resp
ond
ents
exp
eriencin
g e
co
no
mic
crim
e
rep
ort
ed
havi
ng
exp
erienced
brib
ery
and
co
rrup
tio
n c
ase
s in
the la
st
12 m
onth
s (s
ee fi
gure
5). T
he r
isk
of b
rib
ery
and
corr
up
tion is
pre
sent in
m
ost
tra
nsa
ctio
ns
and
in a
ll te
rrito
ries
in
whic
h a
n o
rganis
atio
n o
pera
tes,
b
ut
of p
art
icula
r co
ncern
are
dealin
gs
with
gove
rnm
ent offi
cia
ls in
em
erg
ing
m
ark
ets
, w
here
brib
ery
and
corr
up
tion
is m
ore
pre
vale
nt,
and
where
an
Ho
weve
r, in
our
2009 s
urv
ey,
acco
unting
fra
ud
has
beco
me
incre
asi
ng
ly p
reva
lent.
Of
tho
se
resp
ond
ents
who
rep
ort
ed
eco
no
mic
crim
e in
the la
st 1
2 m
onth
s, 3
8%
re
po
rted
exp
eriencin
g a
cco
unting
fr
aud
. T
his
fo
rm o
f eco
no
mic
crim
e
has
sig
nifi
cantly
incre
ase
d s
ince
2007
(se
e fi
gure
5), a
nd
this
ap
pears
to
be li
nked
to
the e
co
no
mic
cyc
le.
The s
urv
ey
resu
lts
hig
hlig
ht
that
acco
unting
manip
ula
tio
ns
are
mo
st
co
mm
on w
ithin
list
ed
org
anis
atio
ns
and
least
co
mm
on in
fam
ily-o
wned
o
rganis
atio
ns.
When w
e lo
oked
at
th
e f
acto
rs p
reva
lent
in t
his
typ
e o
f fr
aud
, re
spo
nd
ents
po
inte
d t
o
‘financia
l ta
rgets
bein
g m
ore
difficult
to a
chie
ve’
(47%
), a
nd
‘senio
r
manag
em
ent
wanting
to
rep
ort
a d
esir
ed
level o
f financia
l
perf
orm
ance’
(25%
).
Acco
unting
fra
ud
enco
mp
ass
es
a v
ariety
of
fraud
ule
nt
actio
ns
inclu
din
g a
cco
unting
manip
ula
tio
ns,
fr
aud
ule
nt
bo
rro
win
g/r
ais
ing
of
finance, fr
aud
ule
nt
ap
plic
atio
n f
or
cre
dit a
nd
unauth
orise
d
transa
ctio
ns/
rog
ue t
rad
ing
.
Acco
un
tin
g f
rau
d –
a c
ase s
tud
y:
There
have
been a
lleg
atio
ns
by
a
whis
tle-b
low
er
of
earn
ing
s m
anip
ula
tio
n a
t a s
ub
sid
iary
, X
YZ
Plc
/Inc/L
td/S
A (it c
ould
hap
pen a
nyw
here
). T
he o
rganis
atio
n h
as
op
era
tio
ns
in 1
40 c
ountr
ies,
has
55,0
00
em
plo
yees
and
a t
urn
ove
r o
f $33.6
bn.
What
actio
ns
are
need
ed
to
inve
stig
ate
?
fore
nsi
c t
eam
with t
he r
ight
skill
s and
exp
erience.
ind
ep
end
ent
ad
vice o
n s
co
pe.
oth
er
are
as
of
the b
usi
ness
/ind
ivid
uals
in
directly
imp
licate
d b
y alle
gatio
ns.
sco
pe a
nd
ap
pro
ach a
nd
allo
w t
hem
access
to
the d
eta
iled
resu
lts.
dela
y th
e a
ud
ited
resu
lts,
if n
ecess
ary
.
‘ Acco
untin
g f
rau
d
has
mo
re t
han
trip
led
si
nce 2
003
’
qu
itIn
tro
du
cti
on
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
8
Our
surv
ey
sho
ws
a c
orr
ela
tio
n
betw
een r
ep
ort
ed
fra
ud
s and
the
freq
uency
of
fraud
ris
k a
ssess
ments
p
erf
orm
ed
by
org
anis
atio
ns.
Tho
se
that
carr
y o
ut
fraud
ris
k a
ssess
ments
als
o r
ep
ort
mo
re f
raud
. C
onve
rsely
, th
ose
org
anis
atio
ns
that
did
no
t carr
y o
ut
any
fraud
ris
k a
ssess
ments
(2
8%
of
all
resp
ond
ents
), d
ete
ct
less
fr
aud
(26%
, see fi
gure
6).
In o
ther w
ord
s,
if y
ou lo
ok f
or
fraud
yo
u w
ill fi
nd
it.
Fig
ure
6: C
orr
ela
tio
n b
etw
een %
of re
spo
nd
ents
exp
eriencin
g e
co
no
mic
crim
e a
nd
fre
quency
of
perf
orm
ance o
f fr
aud
ris
k a
ssess
ments
01
02
03
04
050
60
Mo
nth
ly5
1
Qu
art
erly
38
Every
6 m
on
ths
28
On
ce
31
No
t at
all
26
% r
ep
ort
ed
fra
ud
s
% r
espo
nden
ts w
ho e
xper
ienc
ed e
cono
mic
crim
es in
the
last
12 m
onth
s
The f
ollo
win
g r
esu
lts
were
ob
tain
ed
w
hen w
e a
sked
our
resp
ond
ents
to
re
po
rt h
ow
oft
en t
heir o
rganis
atio
n
has
perf
orm
ed
a fra
ud
ris
k ass
ess
ment:
Ta
ble
1: F
req
uency
of
fraud
ris
k a
ssess
ments
Surv
ey c
ount
Perc
enta
ge
Mo
nth
ly181
6%
Quart
erly
351
11%
Eve
ry s
ix m
onth
s354
12%
Once in
the la
st
12 m
onth
s937
31%
No
t at
all
855
28%
Do
n’t
kno
w359
12%
To
tal
3,0
37
100%
In li
ght
of
the a
pp
are
nt
incre
ase
in
the le
vel o
f eco
no
mic
crim
e r
ep
ort
ed
b
y re
spo
nd
ents
, it is
ala
rmin
g t
o s
ee
that,
in t
he la
st 1
2 m
onth
s, 2
8%
o
f re
spo
nd
ents
did
no
t p
erf
orm
a
fraud
ris
k a
ssess
ment
and
ano
ther
31%
perf
orm
ed
this
task
just
once.
Org
anis
atio
ns
need
to
revi
ew
their
fraud
ris
ks
on a
reg
ula
r b
asi
s –
if th
ey
do n
ot p
rop
erly
und
ers
tand
the r
isk
of
fraud
inhere
nt w
ithin
their b
usi
ness
es,
th
en h
ow
can t
hey
pro
active
ly t
ake
measu
res
to c
om
bat
it?
Fra
ud
dete
ctio
n –
The t
ip o
f
an ic
eb
erg
?
Fra
ud
ris
k a
ssess
ments
are
ess
ential
for
identify
ing
po
tential f
raud
thre
ats
and
weakness
es
in c
ontr
ols
that
cre
ate
op
po
rtunitie
s to
co
mm
it f
raud
. In
our
2009 s
urv
ey,
14%
of
rep
ort
ed
fr
aud
s w
ere
dete
cte
d t
hro
ug
h r
isk
manag
em
ent
measu
res,
inclu
din
g
pre
venta
tive
fra
ud
ris
k a
ssess
ments
as
ag
ain
st o
nly
4%
and
3%
dete
cte
d
by
these
means
in 2
007 a
nd
2005,
resp
ective
ly (se
e fi
gure
7).
licences.
Read
ers
will
be a
ware
of
incre
ase
d r
eg
ula
tio
n in
mo
st p
art
s
of
the w
orld
, p
art
ly a
s a r
esu
lt o
f p
ress
ure
bein
g b
roug
ht
to b
ear
by
org
anis
atio
ns
such a
s th
e O
EC
D,
Un
ited
Natio
ns
and
the W
orld
Bank,
and
anti-c
orr
up
tio
n p
rose
cuto
rs.
This
tre
nd
is li
kely
to
co
ntinue a
s
more
terr
itories
intr
od
uce o
r st
rength
en
anti-c
orr
up
tio
n le
gis
latio
n a
nd
/or
stre
ng
then e
nfo
rcem
ent
actio
ns
in
resp
onse
to
glo
bal p
ress
ure
s.
Wit
h F
CP
A e
nfo
rcem
en
t o
n t
he r
ise,
co
un
trie
s a
rou
nd
th
e w
orl
d a
re:
sig
nato
ries
to in
tern
atio
nal a
nti-c
orr
up
tio
n
fram
ew
ork
s su
ch a
s th
e U
NC
AC
and
the
OE
CD
Anti-b
rib
ery
Co
nve
ntio
n;
executive
s, n
ot
just
org
anis
atio
ns;
to
pre
vent
transn
atio
nal c
orr
up
tio
n;
a s
up
rem
e a
ud
it b
oard
and
sp
ecia
lised
en
forc
em
ent
ag
encie
s;
seiz
ing
, fr
eezi
ng
and
co
nfisc
ating
the
ass
ets
or
pro
ceed
s o
f a c
rim
e;
op
era
tio
ns
and
pub
lic p
rocure
ment,
an
d e
stab
lishin
g e
nfo
rceab
le c
od
es
of
co
nd
uct
for
go
vern
ment
offi
cia
ls.
Giv
en
th
is g
lob
alis
atio
n o
f an
ti-c
orr
up
tio
n,
org
an
isati
on
s s
ho
uld
co
nsid
er:
part
ners
, p
ers
onnel a
nd
co
ntr
acts
in
volv
ed
in a
new
-mark
et
exp
ansi
on;
syst
em
s to
easi
ly s
ee w
here
, w
hy
and
ho
w m
uch m
oney
is b
ein
g s
pent;
co
ntr
ols
to
ensu
re a
ll exp
end
iture
s are
acco
unte
d f
or
– at
all
tim
es;
co
nst
itute
s unaccep
tab
le b
ehavi
our, a
nd
enfo
rcin
g t
he p
resc
rib
ed
co
nse
quences;
em
plo
yees
to a
dd
ress
the im
pacts
of
inte
rnatio
nal a
nti-c
orr
up
tio
n s
tand
ard
s;
wheth
er
em
plo
yees
und
ers
tand
o
rganis
atio
n c
om
plia
nce p
olic
y.
qu
itIn
tro
du
cti
on
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
9
due t
o a
lack o
f su
pp
ort
within
o
rganis
atio
ns,
insu
fficie
nt
pub
licity
and
/or
lead
ers
hip
no
t b
ein
g s
een
to t
ake w
his
tle-b
low
ing
serio
usl
y.
Glo
bally
, 7%
of
fraud
s w
ere
dete
cte
d
thro
ug
h f
orm
al w
his
tle-b
low
ing
p
roced
ure
s. T
his
may
sug
gest
either
the in
eff
ective
ness
or
the a
bse
nce
of
such p
roced
ure
s, w
hic
h c
ould
be
Our
surv
ey
statist
ics
als
o s
ho
w
that
17%
of
the f
raud
s re
po
rted
w
ere
dete
cte
d b
y in
tern
al a
ud
it
(see fi
gure
7), w
hic
h e
merg
ed
once
mo
re a
s th
e m
eans
by
whic
h m
ost
fr
aud
s w
ere
dete
cte
d. A
s no
ted
earlie
r, a
lmo
st t
wo
-third
s o
f th
ose
w
ho
suff
ere
d e
co
no
mic
crim
e in
the
last
12 m
onth
s b
elie
ved
that
the
op
po
rtunitie
s to
co
mm
it f
raud
have
in
cre
ase
d w
ith r
ed
uced
reso
urc
es
dep
loye
d in
inte
rnal c
ontr
ols
.
Perh
ap
s th
e d
ete
ctio
n o
f fr
aud
in
cid
ences
has
falle
n w
ith r
ed
uced
st
aff
within
the in
tern
al c
ontr
ols
team
. A
s su
ch, it is
ap
pare
nt
that,
if t
here
had
no
t b
een a
ny
red
uctio
ns
in
inte
rnal c
ontr
ol s
taff
leve
ls, m
ore
fr
aud
s co
uld
have
been d
ete
cte
d.
While
inte
rnal a
ud
it r
em
ain
s key
to
the d
ete
ctio
n o
f fr
aud
, th
ere
is
a c
lear
trend
in r
ecent
surv
eys
–
inte
rnal a
ud
it is
co
nsi
stently
d
ete
cting
less
of th
e fra
ud
s re
po
rted
(s
ee fi
gure
7). A
nti-f
raud
co
ntr
ols
, esp
ecia
lly r
isk m
anag
em
ent,
were
re
po
rted
havi
ng
dete
cte
d m
ore
fr
aud
s in
our
curr
ent
surv
ey.
Thus
th
e c
om
bin
atio
n o
f an a
nti-f
raud
culture
and
eff
ective
anti-f
raud
co
ntr
ols
, as
we r
eco
mm
end
ed
in
our
2007 s
urv
ey
rep
ort
, ap
pears
to
be im
pro
ving
the d
ete
ctio
n o
f eco
no
mic
crim
e.
As
no
ted
earlie
r, 4
3%
of
the
resp
ond
ents
who
rep
ort
ed
fra
ud
b
elie
ved
there
has
been a
n in
cre
ase
in
the le
vel o
f econom
ic c
rime c
om
pare
d
to 1
2 m
onth
s ag
o. H
ow
eve
r, 6
3%
of
resp
ond
ents
have
mad
e n
o c
hang
e t
o
the fre
quency
of fr
aud
ris
k ass
ess
ments
in
the s
am
e p
erio
d. S
ince f
raud
is n
ot
a s
tatic
thre
at, o
rganis
atio
ns
contin
ually
n
eed
to
ass
ess
their fra
ud
ris
ks. The
imp
ort
ance o
f ad
dre
ssin
g f
raud
ris
ks
sho
uld
be c
onve
yed
fro
m t
he t
op
d
ow
n, w
ith t
he o
bje
ctive
bein
g t
o
deve
lop
a r
ob
ust
anti-f
raud
fra
mew
ork
.
Fig
ure
7:
Dete
ctio
n m
eth
od
s
414
23
Oth
er
dete
ctio
n m
eth
od
s
01
02
030
54
0
14
43
54 4
53 3
78
3
16
21
17
11
14
11
3 30
13
610
Inte
rnal aud
it
Co
rpo
rate
co
ntr
ols
Co
rpo
rate
culture
Beyo
nd
the
influence o
f
manag
em
ent
Susp
icio
us t
ransactio
n r
ep
ort
ing
Fra
ud
ris
k m
anag
em
ent
Co
rpo
rate
security
Ro
tatio
n o
f p
ers
onnel
Whis
tle-b
low
ing
syste
m
Tip
-off
(in
tern
al)
Tip
-off
(exte
rnal)
By law
enfo
rcem
ent
By a
ccid
ent
% r
ep
ort
ed
fra
ud
s
17
19
26
2009
2007
2005
% r
espon
den
ts w
ho
exper
ience
d e
conom
ic c
rim
es in
the
last
12
mon
ths
for
20
09
; an
d in
the
last
2 y
ears
for
20
07
and 2
00
5
A c
om
pre
hen
siv
e f
rau
d r
isk
assessm
en
t sh
ou
ld:
occurr
ence o
f th
e id
entified
fra
ud
ris
ks.
d
ep
art
ments
are
mo
st li
kely
to
co
mm
it
fraud
and
identify
the m
eth
od
s th
ey
are
likely
to
use
.
an
d d
ete
ctive
co
ntr
ols
to
the r
ele
vant
fraud
ris
ks.
an
d p
rocess
es
are
eff
ective
ly d
esi
gned
to
ad
dre
ss id
entified
fra
ud
ris
ks
fraud
ris
ks
resu
ltin
g f
rom
ineff
ective
o
r no
n-e
xis
tent
co
ntr
ols
.
qu
itIn
tro
du
cti
on
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
E
co
no
mic
cri
me
th
rivin
g
in t
he
do
wn
turn
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
0
dete
ct
it o
r have
been r
elu
cta
nt
to
rep
ort
it o
nce u
nco
vere
d.
While
there
are
so
me e
xcep
tio
ns,
our
surv
ey
sho
ws
rela
tive
ly few
fra
ud
s b
ein
g r
ep
ort
ed
by
resp
ond
ents
in A
sia
an
d s
om
e t
err
ito
ries
in S
can
din
avi
a.
Co
nve
rsely
, re
spo
nd
ents
in E
ast
ern
and
West
ern
Euro
pe w
ere
am
ong
th
ose
rep
ort
ing
the h
ighest
incid
ence
of
fraud
. T
ho
se t
err
ito
ries
where
mo
re
than 4
0%
of
resp
ond
ents
rep
ort
ed
fr
aud
co
nsi
sted
of
a m
ix o
f d
eve
lop
ed
eco
no
mie
s and
em
erg
ing
terr
ito
ries.
The b
igg
er
the o
rganis
atio
n,
the h
ard
er
the f
all
Siz
e m
att
ers
when it
co
mes
to t
he
num
ber
of in
cid
ences
of fr
aud
rep
ort
ed
. T
he r
esp
ond
ents
to
our
surv
ey
were
em
plo
yed
in s
mall,
med
ium
and
la
rge o
rganis
atio
ns,
in a
lmo
st e
qual
pro
po
rtio
n a
s sh
ow
n in
the s
urv
ey
dem
og
rap
hic
s in
the m
eth
od
olo
gy
and
ackno
wle
dg
em
ents
sectio
n o
f th
e
rep
ort
. O
ur
surv
ey
sho
ws
a c
orr
ela
tio
n
betw
een t
he s
ize o
f th
e o
rganis
atio
n
(as
measu
red
by
the n
um
ber
of
em
plo
yees)
and
rep
ort
ed
incid
ences
of
fraud
in t
he la
st 1
2 m
onth
s. In o
ur
2009 s
urv
ey,
46%
of
org
anis
atio
ns
with m
ore
than 1
,000 e
mp
loye
es
rep
ort
ed
havi
ng
exp
erienced
at
least
o
ne in
cid
ent
of
eco
no
mic
crim
e
(see fi
gure
8).
Ta
ble
2: O
f th
e t
err
ito
ry r
esp
ond
ents
, p
erc
enta
ge t
hat
rep
ort
ed
fra
ud
Terr
ito
ries t
hat
rep
ort
ed
hig
h levels
of
frau
d (40%
or
mo
re)
% O
rgan
isati
on
s
Russ
ia71%
So
uth
Afr
ica
62%
Kenya
57%
Canad
a56%
Mexic
o51%
Ukra
ine
45%
UK
43%
New
Zeala
nd
42%
Aust
ralia
40%
Te
rrit
ori
es t
ha
t
rep
ort
ed
lo
w le
ve
ls o
f
fra
ud
(20%
or
less)
% O
rgan
isati
on
s
Italy
19%
Sw
ed
en
19%
Sin
gap
ore
18%
Ind
ia
18%
Ind
onesi
a18%
Sw
itze
rland
17%
Fin
land
17%
Ro
mania
16%
Neth
erland
s15%
Turk
ey
15%
Ho
ng
Ko
ng
13%
Jap
an
10%
The d
ep
th a
nd
bre
ad
th o
f o
ur
rese
arc
h a
llow
ed
us
to d
rill
do
wn
deep
ly in
to t
he r
esp
onse
s w
e
ob
tain
ed
, b
efo
re g
roup
ing
data
and
co
mp
aring
it in
the f
ollo
win
g w
ays
.
The g
lob
al p
ictu
re –
fra
ud
re
po
rtin
g d
iffers
fro
m t
err
ito
ry
to t
err
ito
ry
Of
the 3
,037 r
esp
ond
ents
glo
bally
, 905 (3
0%
) rep
ort
ed
havi
ng e
xperienced
fr
aud
in t
he la
st 1
2 m
onth
s. H
ow
eve
r,
the le
vel o
f fr
aud
rep
ort
ing
diff
ers
si
gnifi
cantly
fro
m t
err
ito
ry t
o t
err
ito
ry.
Tab
le 2
illu
stra
tes
the w
ide v
ariatio
n
of
rep
ort
ed
fra
ud
s b
y te
rrito
ry.
Org
anis
atio
ns
in t
err
ito
ries
where
re
lative
ly lo
w le
vels
of
fraud
were
re
po
rted
have
either
faile
d t
o
A d
eep
er
div
e in
to
‘the s
tatist
ics’
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
1
In li
ght
of
this
, it is
inte
rest
ing
that
go
vern
ment/
state
-ow
ned
ente
rprise
s sh
ould
als
o b
e t
he m
ost
satisfi
ed
w
ith c
urr
ent re
gula
tions
(32%
thought
that
reg
ula
tory
/leg
al a
uth
orities
were
q
uite o
r ve
ry e
ffective
). W
hile
these
o
rganis
atio
ns
may
be t
he t
arg
et
o
f cert
ain
fra
ud
sters
, th
e s
urv
ey
sug
gest
s th
at
the m
ain
facto
r co
ntr
ibuting
to
such h
igh le
vels
of
fraud
in g
ove
rnm
ent/
state
-ow
ned
ente
rprise
s is
a la
ck o
f in
tern
al f
raud
p
reve
ntio
n k
no
w-h
ow
and
/or
fraud
p
reve
ntio
n p
roced
ure
s.
This
is s
up
po
rted
by
the f
act
that
a r
ela
tive
ly la
rge p
rop
ort
ion o
f th
e
fraud
s in
go
vern
ment/
state
-ow
ned
ente
rprise
s (1
8%
) w
ere
dete
cte
d
by
accid
ent,
with ju
st 5
% b
ein
g
unco
vere
d t
hro
ug
h f
orm
al w
his
tle-
blo
win
g p
roced
ure
s. O
ne-t
hird
of
go
vern
ment/
state
-ow
ned
ente
rprise
s d
ete
cte
d f
raud
thro
ug
h in
form
al
pro
ced
ure
s (v
ia t
ip-o
ffs)
. T
his
is
hig
her
than t
he g
lob
al a
vera
ge
of
27%
(and
perh
ap
s d
ue t
o a
la
ck o
f tr
ust
in f
orm
al p
roced
ure
s).
In a
dd
itio
n,
altho
ug
h 4
7%
of
go
vern
ment/
state
-ow
ned
ente
rprise
s’ r
esp
ond
ents
belie
ved
th
at
they
were
at
a g
reate
r risk
fro
m
fraud
, o
nly
22%
incre
ase
d t
he
freq
uency
of
their f
raud
ris
k
ass
ess
ments
.
Org
anis
atio
n t
ype –
do
g
ove
rnm
ent/
state
-ow
ned
ente
rprise
s have
a g
reate
r
thre
at
of
eco
no
mic
crim
e?
The r
esu
lts
of
our
surv
ey
sho
w a
p
oss
ible
link b
etw
een t
he t
ype o
f org
anis
atio
n a
nd
the le
vel o
f econom
ic
crim
e e
xperienced
. B
etw
een 2
1%
and
37%
of o
rganis
atio
ns,
when g
roup
ed
b
y ty
pe, re
po
rted
havi
ng
suffere
d
eco
no
mic
crim
e in
the la
st 1
2 m
onth
s (s
ee fi
gure
9). T
his
und
erlin
es
the fact
that
all
org
anis
atio
ns
are
susc
ep
tib
le
to fra
ud
. T
ho
se in
go
vern
ment/
state
-ow
ned
ente
rprise
s, h
ow
eve
r,
rep
ort
ed
the h
ighest
leve
l of econom
ic
crim
e (37%
). T
hey
als
o b
elie
ved
th
em
selv
es
to b
e e
xp
ose
d t
o t
he
gre
ate
st r
isk
of econom
ic c
rim
e (4
7%
) in
the c
urr
ent
eco
no
mic
clim
ate
.
Fig
ure
9:
Fra
ud
s re
po
rted
by
vario
us
typ
es
o
f o
rganis
atio
ns
212
8
37
31
Lis
ted
on t
he
sto
ck e
xchang
e
Go
vern
ment/
sta
te-o
wned
ente
rprises
Private
secto
r
Oth
ers
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts r
epre
senting in
div
idual
org
anis
atio
nal
typ
es
This
has
been a
co
nsi
stent
pic
ture
in
all
of
our
pre
vio
us
surv
eys
, w
here
the
larg
er
org
anis
atio
ns
rep
ort
the h
ighest
num
ber
of fr
aud
s. F
igure
8 s
ho
ws
that
org
anis
atio
ns
with m
ore
em
plo
yees
are
mo
re li
kely
to
rep
ort
at
least
one
fraud
eve
nt.
This
is n
ot
surp
risi
ng
si
nce “
the b
igg
er
the b
ag
of
‘ap
ple
s’
the m
ore
likely
it w
ill c
onta
in a
t le
ast
o
ne r
ott
en o
ne”.
In a
dd
ition, la
rger
org
anis
atio
ns
will
typ
ically
be t
he o
nes
with t
he m
ost
ro
bust
fra
ud
dete
ctio
n
stru
ctu
res.
That
said
, it is
als
o w
ort
h
rem
em
bering
that
there
are
mo
re
pla
ces
to h
ide in
larg
e o
rganis
atio
ns.
In
oth
er
wo
rds,
there
may
be e
ven
mo
re f
raud
s ta
kin
g p
lace in
tho
se
org
anis
atio
ns
– b
ut
they
have
, fo
r th
e
tim
e b
ein
g, esc
ap
ed
dete
ctio
n.
Fig
ure
8: Larg
e o
rganis
atio
ns
rep
ort
mo
re fra
ud
s
01
02
03
04
050
Mo
re t
han 1
000
em
plo
yees
46
201 –
1000
em
plo
yees
26
Up
to
20
01
5
Do
n't
kno
w13
% a
ll re
sp
ond
ents
% r
espon
den
ts r
epre
senting d
iffe
rent
size
s of
org
anis
atio
ns
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
2
and
energ
y and
min
ing
ind
ust
ry
(43%
). T
hese
ind
ust
ries
are
re
no
wned
fo
r th
eir e
xp
osu
re t
o b
id
rig
gin
g a
nd
‘kic
kb
acks’
. O
rganis
atio
ns
in t
hese
secto
rs c
learly
need
to
pay
part
icula
r att
entio
n t
o t
his
are
a o
ver
the c
om
ing
years
.
The in
dust
ry s
ecto
rs t
hat
rep
ort
ed
havi
ng
exp
erienced
mo
st e
co
no
mic
crim
es
are
com
munic
atio
ns,
insu
rance,
financia
l serv
ices,
and
ho
spitalit
y
and
leis
ure
. T
hese
ind
ust
ries
tend
to
be t
arg
ete
d b
y fr
aud
sters
because
o
f th
eir p
rod
uct
or
serv
ice;
eq
ually
, o
rganis
atio
ns
in t
hese
ind
ust
ry
secto
rs t
end
to
have
mo
re r
ob
ust
and
pro
active
anti-f
raud
measu
res.
In
effect,
they
bo
th s
uffer
and
dete
ct
mo
re f
raud
than o
ther
secto
rs.
In 2
007, th
e t
op
fo
ur
ind
ust
ries
rep
ort
ing
fra
ud
were
insu
rance,
reta
il and
co
nsu
mer, g
ove
rnm
ent/
state
-o
wned
ente
rprise
s, a
nd
financia
l se
rvic
es.
Ind
eed
, d
ue t
o t
he n
atu
re o
f th
eir b
usi
ness
, in
sura
nce a
nd
financia
l se
rvic
es
have
rep
ort
ed
co
nsi
stently
hig
h le
vels
of
fraud
ove
r th
e la
st 1
0
years
. T
he 2
009 s
urv
ey
als
o s
ho
ws
that
financia
l serv
ices
is t
he s
ecto
r th
at
has
exp
erienced
the la
rgest
in
cre
ase
in fra
ud
(56%
of re
spo
nd
ents
re
po
rted
an in
cre
ase
in t
he n
um
ber
o
f in
cid
ences
in t
he la
st 1
2 m
onth
s).
This
co
mp
are
s w
ith t
he a
vera
ge
glo
bal fi
gure
of
43%
of
org
anis
atio
ns
acro
ss a
ll se
cto
rs r
ep
ort
ing
an
incre
ase
ove
r th
e s
am
e p
erio
d.
Rela
tive
ly h
igh le
vels
of
brib
ery
and
co
rrup
tio
n w
ere
rep
ort
ed
by
resp
ond
ents
in t
he e
ng
ineering
and
co
nst
ructio
n in
dust
ry (47%
),
No
ind
ust
ry is
imm
une
Turn
ing
to
the m
ost
fra
ud
-pro
ne
ind
ust
ry s
ecto
rs, a p
att
ern
that
w
ill b
e f
am
iliar
to r
ead
ers
fro
m
our
pre
vio
us
surv
eys
em
erg
es:
Fig
ure
11: F
raud
rep
ort
ed
by
ind
ust
ries
01
020
30
40
50
27
26
24
24
20
15
36
21
Co
mm
unic
atio
ns
Insura
nce
Fin
ancia
l serv
ices
Ho
sp
italit
y a
nd
leis
ure
Tra
nsp
ort
atio
n a
nd
lo
gis
tics
Go
vern
ment/
sta
te-o
wned
ente
rprises
Reta
il and
co
nsum
er
Energ
y, u
tilit
ies a
nd
min
ing
Ente
rtain
ment
and
med
ia
Auto
mo
tive
Aero
sp
ace a
nd
defe
nce
Eng
ineering
and
co
nstr
uctio
n
Manufa
ctu
ring
Pharm
aceuticals
and
life s
cie
nces
Chem
icals
Oth
er
ind
ustr
ies/b
usin
ess
37
37
27
42
38
46
45
44
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts r
epre
senting in
div
idual
indust
ry s
ecto
rs
The g
ove
rnm
ent/
state
-ow
ned
ente
rprise
s are
co
nsi
stently
pla
gued
b
y cost
issu
es.
Many
of th
ese
org
anis
atio
ns
have
been p
rese
nte
d
with
incre
asi
ngly
tough c
ost
-red
uctio
n
targ
ets
in r
ecent
years
, and
these
are
beco
min
g e
ven m
ore
onero
us
in
the c
urr
ent econom
ic c
limate
.
Wh
ile g
ove
rnm
ent/
state
-ow
ned
ente
rprise
s are
mo
st li
kely
to
rep
ort
fr
aud
, lis
ted
org
anis
atio
ns
are
mo
st
exp
ose
d t
o r
ep
eat
att
acks
(15%
o
f lis
ted
org
anis
atio
n r
esp
ond
ents
exp
erienced
100-p
lus
incid
ences
o
f fr
aud
in t
he la
st y
ear
– se
e
fig
ure
10).
Fig
ure
10: M
ore
than 1
00 in
cid
ences
of
fraud
re
po
rted
by
vario
us
typ
es
of
org
anis
atio
ns
12
8
13
15
Lis
ted
on t
he
sto
ck e
xchang
e
Go
vern
ment/
sta
te-o
wned
ente
rprises
Private
secto
r
Oth
ers
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts r
epre
senting in
div
idual
org
anis
atio
nal
typ
es
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
3
take a
n a
ctive
inte
rest
in f
raud
ris
ks
within
their o
rganis
atio
n.
By
do
ing
so
, and
by
dem
onst
rating
the h
ighest
eth
ical b
ehavi
our, t
og
eth
er
with
rob
ust
dis
cip
linary
actio
n w
here
th
e p
erp
etr
ato
rs o
f fr
aud
have
been
identified
, th
e r
ight
‘to
ne f
rom
the
top
’ can b
e e
stab
lished
. C
onve
rsely
, se
nio
r executive
s w
ho
ap
pear
unco
ncern
ed
ab
out
fraud
within
th
eir o
rganis
atio
n m
ay
– th
roug
h
a la
ck o
f att
entio
n a
nd
fo
cus
– unw
itting
ly f
ost
er
envi
ronm
ents
w
here
cert
ain
typ
es
of
fraud
are
p
erc
eiv
ed
to
be p
erm
issi
ble
.
Est
ab
lishin
g t
he r
ight
‘to
ne a
t th
e t
op
’ is
ackno
wle
dg
ed
to
be k
ey
in t
he
fig
ht
ag
ain
st f
raud
. C
ert
ain
ly,
one
use
ful d
ete
rrent
for
eco
no
mic
crim
e
has
pro
ved
to
be a
co
rpo
rate
g
ove
rnance s
tructu
re,
sett
ing
out
rob
ust
esc
ala
tio
n p
roced
ure
s th
roug
h
whic
h e
mp
loye
es
can r
ep
ort
their
co
ncern
s o
n a
co
nfid
ential b
asi
s,
secure
in t
he k
no
wle
dg
e t
hat
anyo
ne
found
to
have
co
mm
itte
d f
raud
will
b
e s
eve
rely
dealt w
ith.
As
we h
ave
seen,
the im
pact
of
fr
aud
on e
mp
loye
e m
ora
le c
an c
ause
co
llate
ral d
am
ag
e.
Furt
herm
ore
,
of
the r
esp
ond
ents
who
att
rib
ute
d
gre
ate
r le
vels
of
fraud
to
incre
ase
d
ratio
nalis
atio
n w
ithin
their o
rganis
atio
ns,
em
plo
yees,
but als
o in
vest
ors
, sup
plie
rs,
cust
om
ers
and
po
tential r
ecru
its.
Build
ing
a z
ero
-to
lera
nce c
ulture
Senio
r executive
s re
po
rted
less
fra
ud
th
an o
ther
em
plo
yees,
sug
gest
ing
th
at
they
may
no
t b
e s
uffi
cie
ntly
aw
are
of
the f
ull
exte
nt
of
eco
no
mic
crim
es
in t
heir o
rganis
atio
n.
Ho
weve
r,
fund
am
enta
l to
the fi
ght
ag
ain
st f
raud
is
the a
ttitud
e a
nd
eth
ical s
tance
dem
onst
rate
d b
y th
ose
at
the t
op
.
If o
rganis
atio
ns
want
to g
et
the ‘
tone
at
the t
op
’ rig
ht,
senio
r executive
s need
to
be b
ett
er
info
rmed
ab
out
th
e f
raud
ris
ks
they
are
facin
g.
Our
surv
ey
furt
her
reve
ale
d t
hat
just
26%
of
senio
r executive
s re
po
rted
an
incid
ence o
f eco
no
mic
crim
e in
their
org
anis
atio
n in
the la
st 1
2 m
onth
s.
By
co
ntr
ast
, 34%
of
resp
ond
ents
o
ther
than s
enio
r executive
s re
po
rted
an in
cid
ence o
f eco
no
mic
crim
e in
the
sam
e p
erio
d. E
ither
senio
r executive
s are
no
t re
po
rtin
g in
cid
ences
of
crim
e
or
they
are
no
t b
ein
g m
ad
e a
ware
of
cert
ain
typ
es
of
eco
no
mic
crim
e.
While
sm
alle
r-va
lue f
raud
s m
ay
no
t b
e
esc
ala
ted
to
senio
r m
anag
em
ent,
it is
th
e c
ase
that
eve
n a
rela
tive
ly m
ino
r in
cid
ent
can c
ause
sig
nifi
cant
rep
uta
tio
nal d
am
ag
e. W
e s
tro
ng
ly
belie
ve t
hat
senio
r executive
s sh
ould
perh
ap
s b
ecause
it is
very
difficult t
o
quantify
such c
ost
s.
Fig
ure
12: C
olla
tera
l dam
ag
e
010
20
30
40
Em
plo
yee m
ora
le32
Busin
ess r
ela
tio
ns
23
Rela
tio
ns w
ith r
eg
ula
tors
Org
anis
atio
ns
rep
uta
tio
n/b
rand
19
Oth
ers
Share
price
16
6
4
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts w
ho
exper
ience
d e
conom
ic c
rim
es in
the
last
12
mon
ths
Ho
weve
r, m
ost
dam
ag
ing
, acco
rdin
g
to o
ur
surv
ey,
is t
he im
pact
of
fraud
o
n e
mp
loye
e m
ora
le (re
po
rted
as
‘very
sig
nifi
cant’
or
‘sig
nifi
cant’
by
32%
of
resp
ond
ents
). In r
ealit
y, it
is
imp
oss
ible
to
quantify
the c
ost
of
this
ty
pe o
f co
llate
ral d
am
ag
e (o
r any
oth
er
typ
e), b
ut
it s
ho
uld
be o
f re
al
co
ncern
to
org
anis
atio
ns
– no
one
likes
to s
ee h
ead
lines
ab
out
fraud
w
ithin
the b
usi
ness
, and
this
typ
e o
f co
vera
ge c
an p
ut
off
, no
t ju
st
Beyo
nd
the fi
nancia
l co
nse
quences
Of
the r
esp
ond
ents
that
rep
ort
ed
in
cid
ences
of
fraud
ove
r th
e la
st
12 m
onth
s, 2
7%
said
that
the d
irect
financia
l im
pact
of
this
exp
osu
re w
as
mo
re t
han U
S$500,0
00. B
ut
the c
ost
o
f fr
aud
varies,
dep
end
ing
on t
he
typ
e o
f fr
aud
suff
ere
d. O
ne-q
uart
er
o
f th
e r
esp
ond
ents
who
rep
ort
ed
acco
unting
fra
ud
belie
ved
that
it h
ad
co
st t
hem
mo
re t
han U
S$1 m
illio
n
in t
he la
st 1
2 m
onth
s. B
y co
ntr
ast
, am
on
g r
esp
ond
ents
rep
ort
ing
in
cid
ences
of
ass
et
mis
ap
pro
priatio
n,
only
17%
belie
ved
that
it h
ad
co
st
them
ove
r U
S$1 m
illio
n. In
vie
w o
f
the h
igh in
cid
ence o
f acco
unting
fr
aud
rep
ort
ed
by
our
resp
ond
ents
, th
e c
om
para
tive
ly c
ost
ly fi
nancia
l im
pact
of
this
exp
osu
re is
evi
dently
a s
ignifi
cant
pro
ble
m f
or
many
org
anis
atio
ns.
Ho
weve
r, th
e fallo
ut
fro
m fra
ud
is n
ot
sim
ply
the d
irect
co
st. O
ur
surv
ey
als
o
inve
stig
ate
d t
he c
olla
tera
l dam
ag
e
suff
ere
d b
y o
rganis
atio
ns
and
ask
ed
ab
ou
t th
e im
pact
eco
no
mic
crim
e
had
on t
heir r
ep
uta
tio
n/b
rand
, sh
are
p
rice, em
plo
yee m
ora
le, b
usi
ness
re
latio
ns,
and
rela
tio
ns
with r
eg
ula
tors
(s
ee fi
gure
12). Inte
rest
ing
ly, m
ost
re
spo
nd
ents
do
no
t se
e c
olla
tera
l d
am
ag
e t
o c
ause
sig
nifi
cant
imp
act,
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
4
said
that
the s
enio
r executive
co
mp
ensa
tio
n h
ad
no
variab
le
co
mp
onent.
In o
rganis
atio
ns
where
se
nio
r executive
co
mp
ensa
tio
n
inclu
des
a p
erf
orm
ance-b
ase
d
variab
le c
om
po
nent
of
mo
re t
han
50%
, 36%
rep
ort
ed
havi
ng
suff
ere
d
fraud
. In
co
ntr
ast
, w
here
there
was
no
variab
le p
erf
orm
ance-b
ase
d
co
mp
onent,
only
20%
rep
ort
ed
havi
ng
suff
ere
d f
raud
. T
his
sta
rk
co
ntr
ast
may
sug
gest
that
there
is
a c
orr
ela
tio
n b
etw
een t
he t
wo
. A
dd
itio
nally
, it a
pp
ears
that
each
of
the m
ost
co
mm
on t
ypes
of
fraud
–
ass
et
mis
ap
pro
priatio
n, acco
unting
fr
aud
, and
brib
ery
and
co
rrup
tio
n –
are
mo
st p
reva
lent
when t
here
is
a h
igher
variab
le c
om
po
nent
in t
he
senio
r executive
s’ c
om
pensa
tio
n
stru
ctu
re. It m
ay,
at fir
st s
ight, s
eem
o
dd
that
hig
her
leve
ls o
f ass
et
mis
ap
pro
priatio
n,
for
exam
ple
, arise
w
here
the s
enio
r executive
s re
ceiv
e
a r
ela
tive
ly h
igh p
erf
orm
ance-b
ase
d
co
mp
ensa
tio
n.
Ho
weve
r, in
tim
es
o
f eco
no
mic
uncert
ain
ty,
and
faced
w
ith in
cre
ase
d p
ers
onal fi
nancia
l p
ress
ure
s, it
co
uld
be t
hat
som
e
ind
ivid
uals
are
tem
pte
d t
o in
cre
ase
th
eir e
arn
ing
s b
y fo
ul m
eans,
p
oss
ibly
because
of
perc
eiv
ed
unfa
irness
of
their o
wn e
arn
ing
s com
pare
d to those
of se
nio
r exe
cutiv
es.
rela
tio
nsh
ips
(51%
) and
/or
no
tify
the
rele
vant
reg
ula
tory
auth
orities
(s
ee fi
gure
14).
Fig
ure
14:
Actio
ns
bro
ug
ht
ag
ain
st
exte
rnal f
raud
sters
01
020
30
40
50
6059
51
46
4
16
5
Civ
il actio
n/
crim
inal charg
es
were
bro
ug
ht
No
tify
rele
vant
reg
ula
tory
auth
orities
Cessatio
n o
f b
usin
ess
rela
tio
nship
s
Oth
er
actio
ns
Did
no
thin
g
Do
n’t
kno
w
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts w
ho
exper
ience
d e
conom
ic c
rim
es in
the
last
12
mon
ths
Co
mp
ensa
tio
n s
tructu
re –
is t
his
a b
reed
ing
gro
und
fo
r fr
aud
s?
Our
surv
ey
sho
ws
that
am
ong
re
spond
ents
who rep
ort
ed
econom
ic
crim
e, 12%
said
that,
in t
heir
org
anis
atio
n, th
e s
enio
r executive
co
mp
ensa
tio
n in
clu
des
mo
re t
han
50%
base
d o
n p
erf
orm
ance, th
at
is,
variab
le c
om
po
nent,
where
as
11%
Fig
ure
13: A
ctio
ns
bro
ug
ht
ag
ain
st
inte
rnal f
raud
sters
010
20
30
40
50
60
70
80
90
Dis
mis
sal
85
Civ
il actio
n/c
rim
inal
charg
es w
ere
bro
ug
ht
48
Warn
ing
/rep
rim
and
No
tify
rele
vant
reg
ula
tory
auth
orities
24
Did
no
thin
g
Oth
er
actio
ns
Tra
nsfe
r
22
4 5
2
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts w
ho
exper
ience
d e
conom
ic c
rim
es in
the
last
12
mon
ths
But
altho
ug
h t
here
has
been a
n
incre
ase
in t
he n
um
ber
of
dis
mis
sals
, ano
ther
22%
of
resp
ond
ents
rep
ort
ed
is
suin
g o
nly
warn
ing
s o
r re
prim
and
s.
This
may
reflect
the v
ary
ing
seve
rity
o
f fr
aud
s th
at
were
unco
vere
d b
y th
ese
org
anis
atio
ns
but,
if a
fra
ud
ster
belie
ves
that
the p
unis
hm
ent
for
co
mm
itting
the c
rim
e w
ill b
e m
inim
al,
he o
r sh
e m
ay
be e
nco
ura
ged
to
p
erp
etr
ate
it. For
ext
ern
al p
erp
etr
ato
rs,
the m
ajo
rity
of
org
anis
atio
ns
cho
se t
o
bring
civ
il and
/or
crim
inal c
harg
es
(59%
), t
o t
erm
inate
the b
usi
ness
35%
identifi
ed
‘oth
ers
do it
so it
’s o
kay’
as
bein
g a
co
ntr
ibuto
ry f
acto
r. T
hese
re
sults
em
phasi
se t
he im
po
rtance
of
eff
ective
co
mm
unic
atio
n (a z
ero
-to
lera
nce p
olic
y) b
etw
een m
anagem
ent
and
em
plo
yees
where
att
itud
es
to fra
ud
are
concern
ed
.
Wh
en t
he a
pp
rop
riate
mess
ag
e f
rom
se
nio
r m
anag
em
ent
is n
ot
co
nve
yed
and
/or
rein
forc
ed
thro
ug
h a
pp
rop
riate
actio
ns
and
behavi
ours
, fr
aud
can
have
a m
uch m
ore
dam
ag
ing
imp
act
on a
n o
rganis
atio
n. T
he c
om
ple
x
cultu
ral c
halle
nges
that arise
in the fi
ght
ag
ain
st f
raud
can o
nly
be o
verc
om
e if
th
e w
ork
forc
e h
as
been e
quip
ped
with
the r
ight
skill
s. A
cru
cia
l part
of th
is
pro
cess
invo
lves
senio
r m
anag
em
ent
em
po
wering
and
mo
tiva
ting
em
plo
yees
‘to
do
the r
ight
thin
g,
because
it is
the r
ight
thin
g t
o d
o’.
Once a
financia
l crim
e h
as
been
identified
, th
ere
are
a v
ariety
of actio
ns
that
can b
e t
aken b
y an o
rganis
atio
n.
Ou
r su
rvey
sho
ws
that,
in t
he m
ajo
rity
o
f case
s, in
tern
al p
erp
etr
ato
rs t
end
to
b
e d
ism
isse
d. In
tere
stin
gly
, le
vels
of
dis
mis
sals
fo
r th
ese
crim
es
have
d
oub
led
in t
he la
st t
wo
years
(85%
in
2009 –
see fi
gure
13, 40%
in 2
007).
In e
ffect,
org
anis
atio
ns
loo
kin
g f
or
a
reaso
n t
o r
ed
uce la
bo
ur
and
its
ass
ocia
ted
co
sts
in t
he e
co
no
mic
d
ow
ntu
rn, have
been p
rese
nte
d w
ith
‘easy
pic
kin
gs’
.
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
5
Kno
w y
our
enem
y
As
with p
revi
ous
surv
eys
, th
e s
plit
b
etw
een in
tern
al a
nd
exte
rnal
perp
etr
ato
rs o
f eco
no
mic
crim
e w
as
fairl
y eve
nly
matc
hed
. Org
anis
atio
ns
that
suffere
d fro
m e
co
no
mic
crim
e r
ep
ort
ed
th
at
53%
of p
erp
etr
ato
rs w
ere
inte
rnal
and
44%
were
exte
rnal.
Ho
weve
r,
when w
e r
evi
ew
ed
the r
esp
onse
s b
y in
dust
ry s
ecto
rs, w
e fo
und
that
th
ere
were
fo
ur
ind
ust
ries
(financia
l se
rvic
es,
insu
rance, te
chno
log
y and
co
mm
unic
atio
ns)
that
rep
ort
ed
their
most
sig
nifi
cant fr
aud
s b
ein
g c
om
mitt
ed
b
y ext
ern
al p
erp
etr
ato
rs. R
esp
ond
ents
fr
om
these
fo
ur
ind
ust
ries
alo
ne
rep
rese
nt
28%
of all
resp
onse
s to
our
surv
ey.
Resp
ond
ents
fro
m a
ll o
ther
Fig
ure
15: A
cco
unting
fra
ud
rep
ort
ed
by
all
resp
ond
ents
vers
us
tho
se w
ho
rep
ort
ed
that
the
senio
r executive
s’ c
om
pensa
tio
n in
clu
des
mo
re
than 5
0%
perf
orm
ance-b
ase
d v
aria
ble
com
ponent
010
20
30
40
50
% r
ep
ort
ed
fra
ud
s
44
38
Mo
re t
han 5
0%
perf
orm
ance b
ased
variab
le c
om
po
nent
All
resp
ond
ents
% r
espon
den
ts w
ho
exper
ience
d e
conom
ic c
rim
es in
the
last
12
mon
ths
and
% r
espo
nden
ts fro
m o
rgan
isat
ions
whe
re s
enio
r ex
ecut
ives
’ com
pens
atio
n
incl
udes
mor
e th
an 5
0%
per
form
ance
-bas
ed in
centive
s
Am
ong
org
anis
atio
ns
where
se
nio
r executive
s’ c
om
pensa
tio
n
stru
ctu
re in
clu
des
mo
re t
han
a 5
0%
variab
le c
om
po
nent,
4
4%
of
tho
se r
ep
ort
ing
fra
ud
in
the la
st 1
2 m
onth
s su
ffere
d
acco
unting
fra
ud
, w
here
as,
fr
om
all
resp
ond
ents
, 38%
o
f th
ose
rep
ort
ing
fra
ud
exp
erienced
acco
unting
fra
ud
(s
ee fi
gure
15).
Org
anis
atio
ns
need
to
be a
ware
o
f th
e a
pp
are
nt
heig
hte
ned
fra
ud
risk
s in
this
situatio
n. T
hey
sho
uld
im
ple
ment
ap
pro
priate
co
ntr
ols
and
mo
nito
r clo
sely
to
co
mb
at
th
e r
isk.
ind
ust
ry s
ecto
rs r
ep
ort
ed
suff
ering
th
e m
ost
sig
nifi
cant
fraud
s at
the
hand
s o
f in
tern
al p
erp
etr
ato
rs.
Fig
ure
16: P
erp
etr
ato
rs o
f fr
aud
– b
y in
dust
ry
020
40
60
80
100
Industries that reportedhigher external
perpetrators of fraud
Industries that reportedhigher internal
perpetrators of fraud
Insura
nce
Fin
ancia
l serv
ices
Co
mm
unic
atio
n
Aero
sp
ace a
nd
defe
nce
Techno
log
y
Manufa
ctu
ring
Ho
sp
italit
y a
nd
leis
ure
Chem
icals
Pharm
aceuticals
and
life s
cie
nces
Tra
nsp
ort
atio
n a
nd
lo
gis
tics
Eng
ineering
and
co
nstr
uctio
n
Reta
il and
co
nsum
er
Auto
mo
tive
Energ
y, u
tilit
ies
and
min
ing
Go
vern
ment/
sta
te-o
wned
ente
rprises
Ente
rtain
ment
and
med
ia
Oth
er
ind
ustr
ies/
busin
ess
Pro
fessio
nal
serv
ices
G
lob
al
3525
4539
76
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4
Exte
rnal
Inte
rnal
Unkno
wn
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts r
epre
senting in
div
idual
indust
ry s
ecto
rs
‘ Do
the r
ight
th
ing
, b
ecau
se
it is
the r
ight
th
ing
to
do
’
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
6
Fig
ure
18: P
rofile
of
inte
rnal f
raud
sters
010
20
30
40
50
42
42
14
2
Junio
r sta
ff m
em
bers
Mid
dle
manag
em
ent
Senio
r e
xecutives
Oth
er
em
plo
yees
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts w
ho
repor
ted t
hat
an in
tern
al e
mplo
yee
was
the
mai
n
per
pet
rato
r of
fra
ud
The r
ise in
fra
ud
s b
ein
g c
om
mitte
d b
y m
idd
le m
anag
em
ent
co
uld
be v
iew
ed
in
the c
onte
xt
of
incre
ase
d fi
nancia
l p
ress
ure
s in
the c
urr
ent
eco
no
mic
clim
ate
. O
f re
spo
nd
ents
who
said
fr
aud
sters
incre
ase
d a
bili
ty t
o
‘ratio
nalis
e’ th
eir a
ctio
ns
was
the m
ost
lik
ely
cause
of fr
aud
, 70%
belie
ved
th
at
crim
es
are
co
mm
itte
d t
o m
ain
tain
liv
ing
sta
nd
ard
s. O
f th
is g
roup
, o
ne
in fi
ve b
elie
ved
these
crim
es
are
co
mm
itte
d b
y th
ose
jealo
us
of hig
her
earn
ers
who
se c
om
pensa
tio
n o
r b
onuse
s w
ere
belie
ved
to
be u
nfa
ir.
Of
the r
esp
ond
ents
who
rep
ort
ed
att
ack b
y exte
rnal p
erp
etr
ato
rs,
45%
had
suffere
d fra
ud
by
cust
om
ers
and
20%
by
ag
ents
/inte
rmed
iaries
(see fi
gure
17).
Fig
ure
17: P
rofile
of
exte
rnal f
raud
sters
01
020
30
40
50
45
20
10
25
Custo
mers
Ag
ents
/in
term
ed
iaries
Vend
ors
Oth
er
third
part
ies
% r
ep
ort
ed
fra
ud
s
% r
espon
den
ts w
ho
repor
ted t
hat
an e
xter
nal
per
son w
as t
he
mai
n
per
pet
rato
r of
fra
ud
The s
urv
ey
als
o fo
und
that
the p
rofile
o
f th
e in
tern
al f
raud
ster
is c
hang
ing
ra
pid
ly. E
co
no
mic
crim
es
co
mm
itte
d
by
mid
dle
manag
ers
have
ris
en v
ery
st
rong
ly, no
w a
cco
unting
fo
r 42%
of
all
inte
rnal f
raud
s, u
p fro
m 2
6%
in
2007 (se
e fi
gure
18).
‘ Mid
dle
man
ag
ers
defr
au
d
em
plo
yers
to
main
tain
livi
ng
st
and
ard
s’
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
Th
e f
ra
ud
ho
riz
on
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
A
de
ep
er
div
e in
to
‘th
e s
tati
sti
cs’
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
7
The f
raud
ho
rizo
n
Resp
ond
ents
to
our
surv
eys
have
co
nsi
stently
est
imate
d t
hat
their futu
re
fraud
exp
osu
re is
less
than t
heir
curr
ent
exp
erience. W
ith h
ind
sig
ht,
ho
weve
r, t
his
co
nfid
ence is
oft
en
sho
wn t
o h
ave
been m
isp
laced
.
When a
sked
ab
out
the m
ost
likely
fr
aud
thre
ats
in t
he n
ext
12 m
onth
s,
resp
ond
ents
to
our
surv
ey
identified
ass
et
mis
ap
pro
priatio
n, acco
unting
fr
aud
and
brib
ery
and
co
rrup
tio
n.
Hard
ly s
urp
risi
ng
sin
ce t
hese
typ
es
o
f eco
no
mic
crim
es
were
, aft
er
all,
th
e m
ost
co
mm
only
exp
erienced
fr
aud
s o
ver
the la
st 1
2 m
onth
s.
Ho
weve
r, a
s w
e e
xp
lore
late
r, s
uch
exp
ecta
tions
have
oft
en b
een s
how
n
to b
e in
co
rrect
in t
he p
ast
– a
nd
m
ay
well
pro
ve t
o b
e s
o in
futu
re.
Fig
ure
19:
Trend
s in
perc
ep
tio
n o
f fr
aud
01
020
30
13
22
6
101
1
16
Asset
mis
ap
pro
priatio
n
Acco
unting
fra
ud
Brib
ery
and
co
rrup
tio
n
2007 P
erc
ep
tio
n2009 P
erc
ep
tio
n
% a
ll re
sp
ond
ents
% a
ll re
spon
den
ts’
per
ception
ove
r th
e nex
t 1
2 m
onth
s fo
r 2
00
9;
and o
ver
the
nex
t 2
yea
rs in
the
20
07
surv
ey
Ove
rall,
there
has
been a
n in
cre
ase
in
perc
ep
tio
n le
vels
aro
und
the t
hre
e
mo
st c
om
mo
n t
ypes
of
fraud
. 22%
o
f all
resp
ond
ents
belie
ve t
hat
their
org
anis
atio
n is
susc
ep
tib
le t
o a
sset
mis
ap
pro
priatio
n w
ithin
the n
ext
12 m
onth
s. S
imila
rly,
11%
and
16%
o
f all
resp
ond
ents
belie
ve t
hat
their
org
anis
atio
ns
may
suff
er
acco
unting
fr
aud
or
brib
ery
and
co
rrup
tio
n,
resp
ective
ly (se
e F
igure
19). T
his
is
consi
stent w
ith the o
vera
ll gre
ate
r fr
aud
risk
in t
he c
urr
ent
eco
no
mic
clim
ate
–
mo
re f
raud
is e
xp
ecte
d t
o li
e a
head
.
While
genera
l aw
are
ness
of
the
susc
ep
tib
ility
to
eco
no
mic
crim
e h
as
incre
ase
d,
the fi
nd
ing
s o
f o
ur
surv
eys
o
ver
tim
e t
ypic
ally
hig
hlig
ht
a g
ap
b
etw
een p
erc
ep
tio
n a
nd
realit
y.
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
Co
ntin
ued
Th
e f
ra
ud
ho
riz
on
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
8
‘ Resp
ond
en
ts
have
co
nsi
sten
tly
und
ere
stim
ate
d
their f
utu
re
fraud
exp
osu
re’
Fig
ure
20: P
erc
ep
tio
n in
2007 v
s R
ealit
y
in 2
009
01
020
30
13
20
6
101
1
8
Asset
mis
ap
pro
priatio
n
Acco
unting
fra
ud
Brib
ery
and
co
rrup
tio
n
2007 P
erc
ep
tio
n
2009 R
ealit
y
% a
ll re
sp
ond
ents
% a
ll re
spon
den
ts’
per
ception
ove
r th
e nex
t 1
2 m
onth
s fo
r 20
09
; an
d o
ver
the
nex
t 2
yea
rs in
the
2007 s
urv
ey
Fig
ure
20 s
ho
ws
that
13%
of
all
resp
ond
ents
in 2
007 t
ho
ug
ht
it w
as
likely
that th
ey
would
exp
erience a
sset
mis
ap
pro
priatio
n in
the s
ub
seq
uent
two
years
. H
ow
eve
r, in
our
2009
surv
ey,
20%
of
all
resp
ond
ents
(6
7%
of
tho
se w
ho
rep
ort
ed
exp
eriencin
g e
conom
ic c
rim
e –
see
fig
ure
4) had
been v
ictim
s o
f ass
et
mis
ap
pro
priatio
n in
the la
st y
ear
alo
ne. T
here
is a
sim
ilar
gap
with
the p
erc
ep
tio
n a
nd
exp
erience o
f acco
unting
fra
ud
where
the
perc
ep
tio
n o
f risk
was
only
6%
in
2007, w
hile
the r
ealit
y in
2009 w
as
that
11%
of
all
resp
ond
ents
(38%
o
f th
ose
who
rep
ort
ed
exp
eriencin
g
eco
no
mic
crim
e –
see fi
gure
4) had
actu
ally
suff
ere
d t
his
typ
e o
f fr
aud
in
the p
reced
ing
year.
Brib
ery
and
co
rrup
tio
n is
the o
nly
eco
no
mic
crim
e w
here
perc
ep
tio
n o
f risk
outw
eig
hs
realit
y. In 2
007, 10%
of
all
resp
ond
ents
co
nsi
dere
d t
hem
selv
es
to b
e a
t risk
fro
m b
rib
ery
and
corr
up
tion
in t
he s
ub
seq
uent
two
years
. H
ow
eve
r,
acco
rdin
g t
o o
ur
curr
ent
surv
ey,
only
8%
of all
resp
ond
ents
(27%
of th
ose
w
ho
rep
ort
ed
exp
eriencin
g e
co
no
mic
crim
e –
see fi
gure
4) actu
ally
suffere
d
this
typ
e o
f fr
aud
. C
ert
ain
ly, b
rib
ery
and
co
rrup
tio
n h
as
receiv
ed
exte
nsi
ve
med
ia c
ove
rag
e d
uring
recent
years
and
has
there
fore
co
me o
nto
the
rad
ar
of
the la
rger
multin
atio
nals
. C
onse
quently,
mo
re o
rganis
atio
ns
are
takin
g p
re-e
mp
tive
measu
res
to
pre
vent
brib
ery
and
co
rrup
tio
n,
or
is it
sim
ply
that th
ey
have
not b
een
caug
ht
yet?
In o
ur
surv
ey,
resp
ond
ents
were
ask
ed
who
they
tho
ug
ht
is m
ost
likely
to
perp
etr
ate
a f
raud
– e
xte
rnal o
r in
tern
al f
raud
sters
– in
the n
ext
year.
Fasc
inating
ly, fo
r 10 o
f th
e 1
2 f
raud
lis
ted
, re
spo
nd
ents
on a
glo
bal b
asi
s exp
ect
exte
rnal f
raud
sters
to
be t
he
main
perp
etr
ato
rs in
the y
ear
ahead
. T
he r
ealit
y is
, o
f co
urs
e, th
at
while
so
me o
rganis
atio
ns
will
co
ntinue t
o
face t
hre
ats
fro
m e
xte
rnal f
raud
sters
, a s
ignifi
cant
thre
at
lies
within
the
org
anis
atio
n.
This
ro
se-t
inte
d v
iew
need
s to
be p
rom
ptly
ad
dre
ssed
, o
therw
ise,
org
anis
atio
ns
will
str
ug
gle
to
imp
lem
ent
ad
eq
uate
dete
ctive
and
p
reve
ntive
inte
rnal p
roced
ure
s.
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
Co
nta
cts
T
he
fra
ud
ho
riz
on
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
1
9
Meth
od
olo
gy
Our
fift
h G
lob
al E
co
no
mic
Crim
e S
urv
ey
was
co
nd
ucte
d b
etw
een J
uly
and
No
vem
ber
2009.
A t
ota
l of
3,0
37 r
esp
ond
ents
fr
om
54 c
ountr
ies
co
mp
lete
d o
ur
onlin
e q
uest
ionnaire. T
he p
art
icip
ants
were
ask
ed
to
resp
ond
to
the q
uest
ions
reg
ard
ing
(a
) th
eir o
rganis
atio
n a
nd
(b
) th
e c
ountr
y in
whic
h t
hey
are
locate
d.
Meth
od
olo
gy
and
ackn
ow
led
gem
ents
Asia
Pa
cifi
c652
Aust
ralia
75
Ho
ng
Ko
ng
(and
Chin
a)
67
Ind
ia145
Ind
onesi
a50
Jap
an
73
Mala
ysia
65
Mid
dle
East
co
untr
ies*
14
New
Zeala
nd
85
Phili
pp
ines*
*1
Sin
gap
ore
51
So
uth
Ko
rea**
1
Thaila
nd
25
So
uth
& C
en
tra
l A
me
ric
a275
Arg
entina
39
Bra
zil
62
Chile
76
Do
min
ican R
ep
ub
lic**
1
Ecuad
or*
*1
Mexic
o94
Peru
**1
Venezu
ela
**1
We
ste
rn E
uro
pe
1,2
43
Aust
ria
34
Belg
ium
62
Cyp
rus*
*1
Denm
ark
105
Fin
land
52
Fra
nce
52
Germ
any*
**17
Gre
ece
96
Irela
nd
91
Italy
90
Neth
erland
s76
No
rway
75
Po
rtug
al*
*1
Sp
ain
55
Sw
ed
en
78
Sw
itze
rland
129
UK
229
No
rth
Am
eri
ca
123
Canad
a52
US
A71
Ce
ntr
al &
Ea
ste
rn E
uro
pe
589
Bulg
aria
59
Cze
ch R
ep
ub
lic83
Hung
ary
53
Po
land
63
Ro
mania
55
Russ
ia86
Serb
ia4
Slo
vakia
69
Turk
ey
52
Ukra
ine
65
Afr
ica
145
Ghana
27
Kenya
53
Nam
ibia
**1
So
uth
Afr
ica
63
Sie
rra L
eo
ne**
1
No
pri
ma
ry c
ou
ntr
y s
pe
cifi
ed
10
TO
TA
L3,0
37
*Mid
dle
Eas
t co
untr
ies
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uded
par
tici
pan
ts f
rom
Isra
el, J
ordan
, Kuw
ait, O
man
, Sau
di A
rabia
and U
AE.
**Thes
e ar
e in
div
idual
par
tici
pan
ts f
rom
10
cou
ntr
ies
who
found o
ur
surv
ey a
nd p
artici
pat
ed in
it o
nlin
e.
***5
00
par
tici
pan
ts w
ere
surv
eyed
sep
arat
ely
in G
erm
any.
Vis
it h
ttp:/
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ri2
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e/ t
o re
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he
Ger
man
surv
ey r
esults.
Ta
ble
3: P
art
icip
ating
terr
ito
ry c
ounts
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Co
nta
cts
Co
ntin
ued
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
2
0
Tab
le 8
: Jo
b titl
e o
f p
art
icip
ants
in the o
rganis
atio
n
% o
rgan
isati
on
s
Sen
ior
execu
tives
52%
Chie
f E
xecutive
Offi
cer/
Pre
sid
ent/
Manag
ing
D
irecto
r
12%
Chie
f F
inancia
l Offi
cer/
Treasu
rer/
Co
ntr
olle
r30%
Chie
f O
pera
ting
Offi
cer
2%
Chie
f In
form
atio
n O
fficer/
Techno
log
y D
irecto
r1%
Oth
er
senio
r executive
4%
Bo
ard
mem
ber
3%
No
n-s
en
ior
execu
tives:
48%
Senio
r V
ice P
resi
dent/
Vic
e
Pre
sid
ent/
Directo
r8%
Head
of
busi
ness
unit
3%
Head
of
dep
art
ment
15%
Manag
er
15%
Oth
ers
7%
Ta
ble
5: O
rganis
atio
n t
ypes
part
icip
ating
% o
rgan
isati
on
s
Lis
ted
on a
sto
ck
exchang
e43%
Priva
te s
ecto
r42%
Go
vern
ment
and
p
ub
lic s
ecto
r10%
Oth
ers
5%
Ta
ble
6: S
ize o
f p
art
icip
ating
org
anis
atio
ns
% o
rgan
isati
on
s
Up
to
200 e
mp
loye
es
32%
201 t
o 1
,000 e
mp
loye
es
33%
Mo
re t
han 1
,000 e
mp
loye
es
34%
Do
n’t
kno
w1%
Ta
ble
7: F
unctio
n (m
ain
resp
onsi
bili
ty) o
f p
art
icip
ants
in t
he o
rganis
atio
n % o
rgan
isati
on
s
Executive
manag
em
ent
o
r finance
58%
Aud
it12%
Ris
k m
anag
em
ent
5%
Co
mp
liance
4%
Security
4%
Ad
viso
ry/c
onsu
ltancy
3%
Leg
al
3%
Op
era
tio
ns
and
pro
ductio
n3%
Oth
ers
8%
Ta
ble
4: P
art
icip
ating
ind
ust
ry g
roup
s
% o
rgan
isati
on
s
Aero
space &
Defe
nce
1%
Auto
mo
tive
4%
Chem
icals
2%
Co
mm
unic
atio
n
2%
Energ
y, U
tilit
ies
& M
inin
g
7%
Eng
ineering
& C
onst
ructio
n
7%
Ente
rtain
ment
& M
ed
ia3%
Fin
ancia
l Serv
ices
16%
Gove
rnm
ent and
P
ub
lic S
ecto
r 6%
Ho
spitalit
y and
Leis
ure
2%
Insu
rance
5%
Manufa
ctu
ring
14%
Pharm
aceuticals
and
Life S
cie
nces
5%
Pro
fess
ional S
erv
ices
6%
Reta
il &
Co
nsu
mer
9%
Techno
log
y 5%
Tran
spo
rtatio
n
& L
og
istics
5%
Oth
er
Ind
ust
ries/
busi
ness
1%
Tab
le 9
: O
rganis
atio
ns
where
senio
r executive
co
mp
ensa
tio
n in
clu
des
a p
erf
orm
ance-b
ase
d
variab
le c
om
po
nent
% o
rgan
isati
on
s
Less
than 2
0%
24%
20%
to
50%
36%
Mo
re t
han 5
0%
10%
No
perf
orm
ance-b
ase
d
variab
le c
om
po
nent
16%
Do
n’t
kno
w14%
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Co
nta
cts
Co
ntin
ued
Me
tho
do
log
y a
nd
ac
kn
ow
led
ge
me
nts
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
2
1
Mo
ne
y la
un
de
rin
g
Actio
ns
inte
nd
ed
to
leg
itim
ise t
he
pro
ceed
s o
f crim
e b
y d
isg
uis
ing
th
eir t
rue o
rig
in.
IP in
frin
ge
me
nt
(in
clu
din
g
tra
de
ma
rks,
pa
ten
ts,
co
un
terf
eit
pro
du
cts
an
d s
erv
ice
s)
This
inclu
des
the il
leg
al c
op
ying
and
/or
dis
trib
utio
n o
f fa
ke g
oo
ds
in
bre
ach o
f p
ate
nt
or
co
pyr
ight,
and
th
e c
reatio
n o
f fa
lse c
urr
ency
no
tes
and
co
ins
with t
he in
tentio
n o
f p
ass
ing
them
off
as
genuin
e.
Ille
ga
l in
sid
er
tra
din
g
Illeg
al i
nsi
der
trad
ing
refe
rs g
enera
lly
to b
uyi
ng o
r se
lling a
security
, in
bre
ach
of a fi
ducia
ry d
uty
or
oth
er
rela
tio
nsh
ip
of
trust
and
co
nfid
ence,
while
in
po
ssess
ion o
f m
ate
rial,
no
n-p
ub
lic
info
rmatio
n a
bo
ut
the s
ecurity
. In
sid
er
trad
ing
vio
latio
ns
may
als
o in
clu
de
‘tip
pin
g’
such in
form
atio
n,
securities
trad
ing
by
the p
ers
on ‘
tip
ped
’, a
nd
se
curities
trad
ing
by
tho
se w
ho
m
isap
pro
priate
such in
form
atio
n.
Esp
ion
ag
e
Esp
ionag
e is
the a
ct
or
pra
ctice o
f sp
ying
or
of
usi
ng
sp
ies
to o
bta
in
secre
t in
form
atio
n.
of
the o
rganis
atio
n. T
his
can in
volv
e
acco
unting
manip
ula
tio
ns,
fra
ud
ule
nt
borr
ow
ings/
rais
ing o
f fin
ance, f
raud
ule
nt
ap
plic
atio
n fo
r cre
dit a
nd
unauth
orise
d
transa
ctio
ns/
rog
ue t
rad
ing
.
Co
rru
pti
on
an
d b
rib
ery
(in
clu
din
g
rac
ke
tee
rin
g a
nd
exto
rtio
n)
The u
nla
wfu
l use
of an o
fficia
l po
sitio
n
to g
ain
an a
dva
nta
ge in
co
ntr
ave
ntio
n
of d
uty
. T
his
can in
volv
e t
he p
rom
ise
of an e
co
no
mic
benefit
or
oth
er
favo
ur,
the u
se o
f in
tim
idatio
n o
r b
lackm
ail.
It c
an a
lso
refe
r to
the a
ccep
tance o
f su
ch in
ducem
ents
.
Asse
t m
isa
pp
rop
ria
tio
n
(in
clu
din
g e
mb
ezzle
me
nt/
de
ce
pti
on
by e
mp
loye
es)
The t
heft
of ass
ets
(in
clu
din
g m
oneta
ry
ass
ets
/cash
or
sup
plie
s and
eq
uip
ment)
by
directo
rs, o
thers
in fi
ducia
ry
po
sitio
ns
or
an e
mp
loye
e f
or
their
ow
n b
enefit.
Ac
co
un
tin
g f
rau
d
Fin
ancia
l sta
tem
ents
and
/or
oth
er
do
cum
ents
are
altere
d o
r p
rese
nte
d
in s
uch a
way
that
they
do
no
t re
flect
the t
rue v
alu
e o
r financia
l activi
ties
Term
ino
log
y
Due t
o t
he d
ivers
e d
esc
rip
tio
ns
o
f in
div
idual t
ypes
of
eco
no
mic
crim
e in
co
untr
ies’
leg
al s
tatu
tes,
w
e d
eve
lop
ed
the f
ollo
win
g
cate
go
ries
for
the p
urp
ose
s o
f
this
surv
ey.
These
desc
rip
tio
ns
w
ere
defined
as
such in
our
su
rvey
quest
ionnaire.
Ec
on
om
ic c
rim
e o
r fr
au
d
The in
tentio
nal u
se o
f d
eceit
to d
ep
rive
ano
ther
of
mo
ney,
p
rop
ert
y o
r a le
gal r
ight.
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Co
nta
cts
M
eth
od
olo
gy a
nd
ac
kn
ow
led
ge
me
nts
Co
ntin
ued
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
2
2
Fra
ud
tri
an
gle
Fra
ud
triang
le d
escrib
es t
he
inte
rco
nnecte
d c
ond
itio
ns t
hat
act
as h
arb
ing
ers
to
fra
ud
: o
pp
ort
unity
to c
om
mit fra
ud
, in
centive (or
pre
ssure
)
to c
om
mit f
raud
, and
the a
bili
ty o
f
the p
erp
etr
ato
r to
ratio
nalis
e t
he a
ct.
Se
nio
r e
xe
cu
tive
The s
enio
r executive (fo
r exam
ple
the
CE
O, M
anag
ing
Directo
r o
r E
xecutive
Directo
r) is t
he m
ain
decis
ion-m
aker
in t
he o
rganis
atio
n.
No
te
: In
so
me c
ases p
erc
enta
ges m
ay t
ota
l
mo
re o
r le
ss t
han 1
00 p
erc
ent
as r
esp
ond
ents
were
ab
le t
o p
rovid
e m
ultip
le a
nsw
ers
.
Ab
ou
t P
wC
Fo
ren
sic
Se
rvic
es
The F
ore
nsic
Serv
ices g
roup
of
the
Pricew
ate
rho
useC
oo
pers
’ g
lob
al
netw
ork
of
firm
s p
lays a
lead
ro
le in
ad
dre
ssin
g t
he life c
ycle
of
fraud
and
oth
er
avo
idab
le lo
sses, p
rovid
ing
reactive investig
ative s
erv
ices a
nd
pro
active r
em
ed
ial and
co
mp
liance
serv
ices t
o c
lients
in t
he p
rivate
and
pub
lic s
ecto
rs.
Fin
an
cia
l p
erf
orm
an
ce
This
can b
e d
efined
as m
easuring
the
results o
f an o
rganis
atio
n’s
po
licie
s
and
op
era
tio
ns in m
oneta
ry t
erm
s.
These r
esults a
re r
eflecte
d in r
etu
rn
on in
vestm
ent,
retu
rn o
n a
ssets
and
valu
e a
dd
ed
; ty
pic
ally
, In
the p
rivate
secto
r, r
etu
rns w
ill b
e m
easure
d in
term
s o
f re
venue; in
the g
overn
ment/
sta
te-o
wned
ente
rprises, re
turn
s w
ill
be m
easu
red
in term
s of se
rvic
e d
eliv
ery
.
Fra
ud
ris
k a
sse
ssm
en
t
Fra
ud
ris
k a
ssessm
ents
are
used
to a
scert
ain
wheth
er
an o
rganis
atio
n
has u
nd
ert
aken a
n e
xerc
ise t
o
sp
ecifi
cally
co
nsid
er:
(i) th
e f
raud
ris
ks t
o w
hic
h o
pera
tio
ns
are
exp
osed
;
(ii) a
n a
ssessm
ent
of
the m
ost
thre
ate
nin
g r
isks (i.e. evalu
ate
ris
ks
for
sig
nifi
cance a
nd
lik
elih
oo
d o
f
occurr
ence);
(iii)
id
entificatio
n a
nd
evalu
atio
n o
f th
e
co
ntr
ols
(if a
ny) th
at
are
in p
lace t
o
mitig
ate
the k
ey r
isks;
(iv) ass
ess
ment of th
e g
enera
l anti-f
raud
pro
gra
mm
es a
nd
co
ntr
ols
in a
n
org
anis
atio
n; and
(v) actio
ns t
o r
em
ed
y a
ny g
ap
s in
the c
ontr
ols
.
qu
itIn
tro
du
cti
on
Ec
on
om
ic c
rim
e t
hri
vin
g
in t
he
do
wn
turn
A d
ee
pe
r d
ive
in
to
‘th
e s
tati
sti
cs’
Th
e f
ra
ud
ho
riz
on
Co
nta
cts
M
eth
od
olo
gy a
nd
ac
kn
ow
led
ge
me
nts
Co
ntin
ued
pri
nt
Glo
ba
l E
co
no
mic
Cri
me
Su
rve
y
No
ve
mb
er
2009
Pri
ce
wa
terh
ou
se
Co
op
ers
2
3
INS
EA
D
As
one o
f th
e w
orld
’s le
ad
ing
and
larg
est
gra
duate
busi
ness
scho
ols
, IN
SE
AD
(w
ww
.inse
ad
.ed
u) b
ring
s to
geth
er
peo
ple
, culture
s and
ideas
fro
m a
round
the w
orld
to
chang
e li
ves
and
tra
nsf
orm
org
anis
atio
ns.
This
wo
rld
ly p
ers
pective
and
cultura
l d
ivers
ity
are
reflecte
d in
all
asp
ects
of o
ur
rese
arc
h a
nd
teachin
g. W
ith t
wo
cam
puse
s in
Asi
a (S
ing
ap
ore
) and
Euro
pe (F
rance), t
wo
centr
es
in Isr
ael a
nd
Ab
u D
hab
i, and
an
o
ffice in
New
Yo
rk, IN
SE
AD
exte
nd
s th
e r
each o
f its
busi
ness
ed
ucatio
n a
nd
rese
arc
h
acro
ss t
hre
e c
ontinents
. O
ur
14
5 r
en
ow
ned
facu
lty
mem
bers
fro
m 3
7 c
ou
ntr
ies
insp
ire m
ore
than 1
,000 d
eg
ree p
art
icip
an
ts in
ou
r M
BA
, E
xecu
tive
MB
A a
nd
Ph
D
pro
gra
mm
es.
In a
dd
itio
n, m
ore
th
an
9,5
00
execu
tive
s p
art
icip
ate
in IN
SE
AD
’s
executive
ed
ucatio
n p
rog
ram
mes.
We o
ffer
38
op
en
-en
rolm
ent
pro
gra
mm
es
for
all
busi
ness
dis
cip
lines
and
desi
gn
18
4 c
ust
om
learn
ing
so
lutio
ns
for
gro
up
s o
f executive
s fr
om
a s
pecifi
c o
rgan
isatio
n y
early.
Sh
ou
ld y
ou
wis
h t
o fi
nd
ou
t m
ore
ab
out
Executive
Deve
lop
men
t fo
r in
div
idu
al e
xecu
tive
s o
r ab
ou
t o
ur
Co
mp
an
y-sp
ecifi
c P
rog
ram
mes,
ple
ase
co
nta
ct
us
at
execed
.eu
rop
e@
inse
ad
.ed
u o
r
info
-csp
.fb
@in
sead
.ed
u.
Ackno
wle
dg
em
ents
The 2
009 G
lob
al E
co
no
mic
Crim
e S
urv
ey
ed
ito
rial t
eam
co
nsi
sted
of
the
follo
win
g in
div
iduals
:
Su
rve
y L
ea
de
rsh
ip T
ea
m
To
ny P
art
on
, P
art
ner,
United
Kin
gd
om
Vid
ya
Ra
jara
o, P
art
ner,
Ind
ia
Ste
ve
n S
ka
lak
, P
art
ner,
US
A
Su
rve
y M
an
ag
em
en
t Te
am
Fa
isa
l A
hm
ed
, P
roje
ct
Manag
er,
United
Kin
gd
om
Ne
il C
orm
ac
k, M
ark
eting
Co
nsu
ltant,
U
nited
Kin
gd
om
INS
EA
D (
Fra
nc
e)
Do
ug
las H
. F
ran
k,
Ass
ista
nt
Pro
fess
or
of
Str
ate
gy,
IN
SE
AD
Ed
ito
ria
l Te
am
me
mb
ers
Mo
na
Cla
yto
n,
Part
ner,
Bra
zil
Jo
hn
Do
nk
er,
Part
ner,
Ho
ng
Ko
ng
Pe
ter
Fo
rwo
od
, M
anag
er,
Aust
ralia
Lin
da
Ma
cp
ha
il,
Ass
ocia
te D
irecto
r,
So
uth
Afr
ica
Ma
lco
lm S
ha
ck
ell,
Part
ner,
Aust
ralia
Lo
uis
Str
yd
om
, P
art
ner,
So
uth
Afr
ica
Pie
rre
Ta
ille
fer,
Part
ner,
Canad
a
Jo
hn
Wilk
inso
n,
Part
ner,
Russ
ia
Part
icula
r th
anks
in c
om
pili
ng
this
rep
ort
are
als
o d
ue t
o t
he fo
llow
ing
ind
ivid
uals
at
Pricew
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use
Co
op
ers
:
Mik
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sco
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, P
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ell,
Ste
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am
pb
ell,
Arijit
Chakra
bo
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Jennifer
Cib
inic
, T
irth
ankar
Gho
sh,
Tracey
Gro
ves,
Kare
na K
ay,
Tim
Kau, E
lain
e K
eo
wn, R
uth
Law
son, N
oel M
cC
art
hy,
Jo
el O
sbo
rne,
Am
rita
Sid
hu
and
Suza
nne S
no
wd
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on
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M
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ac
kn
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led
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Pricew
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ricew
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All
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Pricew
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Co
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United
Kin
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Co
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tony.
d.p
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vid
ya.r
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.pw
c.c
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ste
ven.s
kala
k@
us.p
wc.c
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chris.b
arb
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us.p
wc.c
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john.d
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hk.p
wc.c
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and
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uk.p
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