Survey: SA ranks third globally for high rates of economic crime

Survey: SA ranks third globally for high rates of economic crime

- After China and India, South Africa has ranked third globally for having the highest reported incidents of economic crime

- This is according to PwC's 2020 Global and Economic Crime and Fraud Survey

- The report focused on the rising impact of economic crimes in the private sector and economy

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South Africa has ranked third in a global study focused on reported incidents of economic crime by PWC.

Fin24 reports that the 2020 Global and Economic Crime and Fraud Survey was recently launched by the PwC forensic team as well as a panel of experts.

The survey had encompassed 5 000 individuals from over 99 territories and highlighted the impact of economic crimes.

245 of the respondents were from South Africa with 71% occupying chief executive-level positions.

The local respondents reported a 60% rate when it came to economic crimes which showed an improvement on the 2018 result of 77%.

READ ALSO: President Ramaphosa addresses South Africa over technical recession

But this 17% decrease in the level of crimes reported is not a true victory, with the overall level of crime in the country higher than the international average of 47%.

The types of economic crimes reported vary, with customer fraud currently the highest recorded. This figure is up to 47% from 41% reported in 2018.

Bribery and corruption have also seen an increase, from 30% to 42%. Accounting fraud has increased to 34%.

These crimes, according to the report, are expected to cause disruption in SA over the next two years.

Financial statement fraud has also been highlighted, concerning because it involved top dogs at various companies. PwC found that senior management involvement has risen from 20% to 34%.

Fraud Survey Leader and panellist Trevor White explained that financial statement fraud was putting pressure on the economy and as a result is easier to spot:

"I think what's really caused them to start to be exposed is the downturn in the economy. There are not so many places to hide and as a result, the organisations can't keep this house of cards going. If there is a small crack, everything crumbles."

Once a popular form of economic crime, asset misrepresentation has gone from 49% to 23% with White commenting:

"People aren't considering petty theft - just theft of assets - as an economic crime any more because there is now the exposure of bribery and corruption and financial statement fraud and cybercrime. They are starting to think that those are the real economic crimes."

In other news, reported that President Cyril Ramaphosa addressed the technical recession saying that flagging consumer confidence, load-shedding and a slump in the agricultural sector had all contributed.

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