Growing number of firms suffer economic crime

More than half of UK companies surveyed have been victims of economic crime in the last two years, according to new research.

The latest PricewaterhouseCoopers Global Economic Crime Survey has found that UK companies report some of the highest levels of economic crime in the world.

Thirty-five per cent of respondents reported financial misrepresentation (which includes inappropriate provisioning, write-offs and revenue recognition procedures), up from 12% in 2003.

Those companies saw the highest average number of incidents, typically suffering seven incidents of financial misrepresentation in the last two years.

Based on 3,634 interviews with companies in 34 countries, the third survey is the most comprehensive global assessment of the nature and impact of economic crime.

It questioned 300 UK companies and revealed that UK businesses suffered an average of £1m per year in losses from ‘tangible frauds’ (those that result in an immediate and direct financial loss), such as asset misappropriation, false pretences and counterfeiting.

Andrew Clark, partner in the investigations and forensic services practice at PricewaterhouseCoopers, said: “The continued rise in economic crime poses a serious threat to UK businesses, although this in part demonstrates the improvement in detection and reporting methods in the UK.

“Many companies have a false sense of security when it comes to economic crime, so they need to tighten their controls to avoid not only direct financial losses, but also damage to their brand, staff morale and to relationships with customers, suppliers and other business partners.”