By Standard Digital Reporter
NAIROBI, KENYA: Economic crime against businesses and other organisations continues to impact growth in Kenya, a new report reveals.
According to PwC's Economic crime report (a threat to business processes) some 52 per cent of respondents say they have been victims of economic crime compared to 66 per cent in 2011.
The decline in reported incidences of economic crime in Kenya is in line with the average for Africa respondents (50 per cent) but is still high compared to the global average (37 per cent).
Furthermore, among Kenya respondents, the frequency of incidences and their related costs are going up. The percentage of those who suffered 11 – 100 incidences of economic crime in the last 24 months has risen from 15 per cent in PwC’s 2011 survey to 31 per cent in the 2014 survey. A third (34 per cent) of those suffering from economic crime report that its total cost is between $100,000 and $5 million, compared to 25 per cent in the 2011 survey.
‘We know that the incidence of economic crime is declining, partly because of better controls and awareness, but there is also a worrisome trend underlying these efforts,” . commented Alphan Njeru, the Advisory Services leader for PwC Kenya.
The frequency and cost of economic crime is going up for many respondents. Many of them represent financial services companies, which are disproportionately impacted by economic crime.
“Some companies in Kenya may have become over reliant on technology, which can open them up to fraud. Others may have grown complacent, especially with regard to controls affecting middle management’s access to information and systems. And cyber criminals can prey upon large pools of ‘‘virtual money,’’he noted.
PwC’s survey, the most extensive on the subject, found that asset misappropriation remains the most frequently reported type of economic crime in Kenya (among 77 per cent of respondents who reported experiencing economic crime) and globally (69 per cent). In Kenya, it is followed by accounting fraud (38 per cent), procurement fraud (31 per cent) bribery and corruption (27 per cent), and cybercrime (22 per cent).
‘Collectively, these are the ‘‘big five’’ economic crimes,’ said Muniu Thoithi, Forensics Services leader for PwC Kenya. ‘In our past surveys, we saw the ‘‘big three’’ occurring most frequently: asset misappropriation, accounting fraud and bribery and corruption. Now, many organisations are experiencing five main types of crime. This shows that fraudsters are becoming increasingly savvy.’ For full report
