By Mohammad Shoeb
DOHA: The rate of economic crimes faced by organisations in the Middle East is much lower than the global average. However, the rate of such crimes and offences in the region have seen a marginal rise over the last two years, results of a latest survey conducted by PwC show.
Middle East Economic Crime Survey for 2016 says 26% of organisations in the region have experienced economic crimes in the past 24 months, lower than the global average of 36% though a 5% increase since 2014.
Cybercrime remains the second most reported economic offences faced by companies and other entities. Some 30% organisations have been affected so far and 39% think they will be affected in the next two years. As far response to such crimes is concern, most companies are still not adequately prepared for or even understand the risks faced. Only 33% organisations have a cyber-incident response plan.
PwC, one of the most prestigious accounting and other professional services providing firms in the world, has been surveying trends in global economic crime in the Middle East since 2011. In that time, despite efforts to combat economic crime, there has been no clear indication that levels in the Middle East or globally have decreased.
Although the number of affected organisations in the Middle East was lower compared to the global average, the number in the region who simply did not know if they had been a victim was much higher than the global average (20% against 11%), indicating uncertainty as to whether their organisations are experiencing economic crime. Launched yesterday, the report titled: ‘Adjusting the Lens on Economic Crime in the Arab World’ illustrates how economic crime has evolved over the last two years, morphing into different forms depending on industrial sector and region.
“The challenge for businesses is to close down the opportunities to commit economic crime. A major part of this is staying ahead of new threats, while developing new ways to prevent, detect and respond effectively to those threats. It’s also vital to ensure that organisations have a culture based on strong values, supported by robust policies and ethics and compliance programmes. This needs to be integrated into day-to-day decision-making to be successful,” said Nick Robinson, PwC Regional Forensic Services Leader.
The survey shows that even though there has been a marginal decrease, it is possible that this small decrease is actually masking a worrying trend –that economic crime is changing significantly, but that detection and controls are not keeping up with the pace of change. Further, the financial cost of each fraud is on the rise. According to the survey, one in four organisations have not carried out a single fraud risk assessment in the last 24 months, while 17% are discovered by mere accident. This suggests that organisations need to ensure that they are not lulled into a false sense of security if the level of reported incidents are low and that they revisit their fraud detection mechanisms. The survey highlights that the role of internal audit in detecting fraud has been more effective compared to how it was in 2014, despite it being slightly below the global average.
Tareq Haddad, PwC Partner, Middle East Investigations Leader, said: “It takes continuous efforts to combat the persistent issue of economic crime. Over the year it has been proven that managements who have put in place strong anti-fraud programmes have preserved the value and reputation of their organisations and gained the trust of stakeholders through demonstrating its ability to deal with such complex issues. Such programmes must include a proper fraud risk assessment and putting effective mechanisms in place to deter, prevent and detect fraud. Furthermore, an organisation’s reaction to fraud incidents and continuous improvement of its systems over time is key to mature its abilities to manage the risk of fraud.” The Peninsula
By Mohammad Shoeb
DOHA: The rate of economic crimes faced by organisations in the Middle East is much lower than the global average. However, the rate of such crimes and offences in the region have seen a marginal rise over the last two years, results of a latest survey conducted by PwC show.
Middle East Economic Crime Survey for 2016 says 26% of organisations in the region have experienced economic crimes in the past 24 months, lower than the global average of 36% though a 5% increase since 2014.
Cybercrime remains the second most reported economic offences faced by companies and other entities. Some 30% organisations have been affected so far and 39% think they will be affected in the next two years. As far response to such crimes is concern, most companies are still not adequately prepared for or even understand the risks faced. Only 33% organisations have a cyber-incident response plan.
PwC, one of the most prestigious accounting and other professional services providing firms in the world, has been surveying trends in global economic crime in the Middle East since 2011. In that time, despite efforts to combat economic crime, there has been no clear indication that levels in the Middle East or globally have decreased.
Although the number of affected organisations in the Middle East was lower compared to the global average, the number in the region who simply did not know if they had been a victim was much higher than the global average (20% against 11%), indicating uncertainty as to whether their organisations are experiencing economic crime. Launched yesterday, the report titled: ‘Adjusting the Lens on Economic Crime in the Arab World’ illustrates how economic crime has evolved over the last two years, morphing into different forms depending on industrial sector and region.
“The challenge for businesses is to close down the opportunities to commit economic crime. A major part of this is staying ahead of new threats, while developing new ways to prevent, detect and respond effectively to those threats. It’s also vital to ensure that organisations have a culture based on strong values, supported by robust policies and ethics and compliance programmes. This needs to be integrated into day-to-day decision-making to be successful,” said Nick Robinson, PwC Regional Forensic Services Leader.
The survey shows that even though there has been a marginal decrease, it is possible that this small decrease is actually masking a worrying trend –that economic crime is changing significantly, but that detection and controls are not keeping up with the pace of change. Further, the financial cost of each fraud is on the rise. According to the survey, one in four organisations have not carried out a single fraud risk assessment in the last 24 months, while 17% are discovered by mere accident. This suggests that organisations need to ensure that they are not lulled into a false sense of security if the level of reported incidents are low and that they revisit their fraud detection mechanisms. The survey highlights that the role of internal audit in detecting fraud has been more effective compared to how it was in 2014, despite it being slightly below the global average.
Tareq Haddad, PwC Partner, Middle East Investigations Leader, said: “It takes continuous efforts to combat the persistent issue of economic crime. Over the year it has been proven that managements who have put in place strong anti-fraud programmes have preserved the value and reputation of their organisations and gained the trust of stakeholders through demonstrating its ability to deal with such complex issues. Such programmes must include a proper fraud risk assessment and putting effective mechanisms in place to deter, prevent and detect fraud. Furthermore, an organisation’s reaction to fraud incidents and continuous improvement of its systems over time is key to mature its abilities to manage the risk of fraud.” The Peninsula
