global economic crime survey 2005* - pwc€¦ · global economic crime survey leader frankfurt,...
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globaleconomic crime
survey 2005*
i
Steven Skalak, PartnerGlobal Investigations LeaderNew York, USA
November, 2005
Prof. Dr. Kai-D. BussmannChair of Criminology andPenal LawMartin-Luther-University,Halle, Germany
Claudia Nestler, PartnerGlobal Economic CrimeSurvey LeaderFrankfurt, Germany
1 52% of the respondents were members of the executive board and 43% had a main responsibility in finance.
The penalties for violating regulationsare severe and identifying and respondingto incidents of fraud remain ongoingchallenges for even the most sophisticatedof companies
Introduction
We are pleased to presentPricewaterhouseCoopers’ Global EconomicCrime Survey 2005. Based on 3,634interviews with senior executives1 in 34countries, PwC’s third biennial economiccrime survey provides unparalleled depthof insight into the perceptions,awareness, and impact of economiccrime on business around the world.
Fraud continues to be a prominent issueand has become increasingly important in the eyes of the world’s regulators.Tougher domestic and internationalregulations are spurring companies toimprove their governance with the goalsof engendering trust and encouragingfurther investment. The penalties forviolating regulations are severe, andidentifying and responding to incidents offraud remain ongoing challenges for even
the most sophisticated of companies.However, as this survey demonstrates,fraud can be mitigated by effectivecontrols, a strong culture of preventionand deterrence, and assertive action when cases arise.
In conducting this 2005 survey, we havebeen fortunate to collaborate withProfessor Bussmann of Martin-Luther-University, Halle-Wittenberg in Germany.Based on his expertise, we have furtherexplored two topics: “the effectiveness of fraud risk management systems” and “the profiles of fraud perpetrators.”We believe that the results of our analysisin these areas will be of great value inhelping companies to better understandthe significant impact that economiccrimes can have on their business,assess the risks of fraud that they mayface, and find ways to mitigate thoserisks wherever they operate in the world.
This report is based on a very fruitful co-operation between scientists and forensicaccounting practitioners. This co-operationis all the more important because the costof fraud is becoming widely recognized,lessening the reluctance to openly discussthe topic as businesses of all sizes seekpractical deterrence measures. Further, boththe business and academic communitiesdepend on reliable, unbiased information toadvance the study of this topic. This reportmarks another important step towards afuture where experience and practices inthe business world contribute towards ourdialogue on effective control and preventionstrategies. In the fight against economiccrime, we are unlikely to find a panacea, butwe are finding out more about “what works,and what doesn’t”. In order to continue thisprocess, we will need ongoing co-operationwith the business community which – as inthe case of this report – was willing to talkabout this still rather sensitive topic. Forthis, we would like to express our thanks.
Contents
Executive Summary 21 Fraud – a significant and growing threat worldwide 5
1.1 The bigger the company – the harder the fall 51.2 No industry is immune 6
2 Types of economic crime 82.1 The perceived prevalence of fraud 82.2 The different frauds experienced 9
3 The cost of economic crime 103.1 The financial damage from ‘tangible’ fraud 103.2 The penalties from regulators 103.3 ‘Collateral damage’: beyond the financial consequences 12
4 Fraud’s perpetrators 154.1 The greenhouse effect – exploring the environments that propagate fraud 154.2 Profiling the fraudster 16
5 The effectiveness of fraud controls 185.1 Communicating the company’s stance on fraud 205.2 The impact of fraud controls 20
6 Investigating and dealing with fraudsters 236.1 Recovery of stolen assets 24
7 Fraud in the future: an illusion of safety? 268 Demographics 28
8.1 Methodology 288.2 The Global Economic Crime Survey Editorial Board 29
9 Contacts 309.1 PricewaterhouseCoopers Dispute Analysis & Investigations 309.2 Martin-Luther University, Halle-Wittenberg, Germany 30
1
Economic Crime Survey –Executive Summary
1 Fraud, a significant and growing threat worldwide
• 45% of companies worldwide havefallen victim to economic crime in thepast two years – an 8 percentage pointincrease on our previous survey.
• The larger the company, the higher thelikelihood that it will experience anddetect acts of fraud. While companiesaround the world, on average, reportedsuffering 8 fraud incidents since 2003,larger companies reported an averageof 12 incidents.
• No industry is safe – whether regulatedor unregulated. From 38% to 60% ofthe companies in each of the sectorswe surveyed reported significant frauds.
2 Types of economic crime
• The number of companies reportingincidents of fraud has increased inevery category since 2003. In particular,there has been a 71% increase in thenumber reporting corruption & bribery,a 133% increase in the numberreporting money laundering, and a140% increase in the number reportingfinancial misrepresentation.
• Despite the increase in the number offrauds reported, companies perceivedthe prevalence of fraud in their businessto have been greater in 2003 than it istoday. Given the increases documentedin this survey, does this perception reflectan over-confidence in the success ofexisting fraud risk management systems?
3 The cost of economic crime
• In the past two years, the averagefinancial damage to companies fromtangible frauds (i.e., assetmisappropriation, false pretences, andcounterfeiting) was US$ 1.7 million.
• In 2004, 120 accounting-related securitieslitigation matters were filed againstregistrants on US exchanges, 20 of whichwere for criminal activity.
• In the wake of fraud incidents, 40% of thecompanies responding to our surveyindicated that they had suffered significant‘collateral damage’, such as loss ofreputation, decreased staff motivation, anddeclining business relations. The impact ofsuch ‘collateral damage’ was perceivedto be strongest in cases where incidentswere leaked to customers or the media.
4 Fraud’s perpetrators
• For a fraud to occur there must be anopportunity and an individual (or group)with an incentive to commit it, and
those individuals must also be able torationalise their own actions – at leastto themselves. Most frauds reportedinvolved a lack of adequate internalcontrols (opportunity), the need tomaintain an expensive lifestyle(incentive), and the perpetrator’s lack of awareness that their actions werewrong (self-rationalisation).
• In most cases, perpetrators of fraudwere male, between the ages of 31 and 40, and educated to degree levelor higher. Half of the perpetrators wereemployed by the defrauded company,almost one quarter of them in seniormanagement positions.
• Companies typically dismiss perpetrators– although this occurs less often if theperpetrator is employed at the seniormanagement level. While the decisionnot to dismiss a fraudster can behelpful in limiting unwanted media andregulatory attention, our experienceindicates that this approach has little or no long-term value, since it does notact as a deterrent to other potentialfraudsters within the business.
5 The effectiveness of fraud controls
• Despite the growing confidence that thecorporations surveyed have in their riskmanagement systems, most fraud (34%)is still detected by chance (e.g., throughtip-offs). According to 2005 survey
2
respondents, an internal audit is thesingle most successful control/processfor detecting incidents of fraud (26% of cases).
• Companies that employ a range of frauddetection measures uncover significantlymore incidents than those who rely oninternal controls and audit processesalone to detect fraud. They are also morecapable of recovering losses.
6 Investigating and dealing with fraudsters
• Most companies worldwide (81%)launched internal investigations and
informed their Boards of Directorsabout their actions. Almost two thirdsnotified law enforcement agencies.Many companies also commissionedexternal investigators.
• In 89% of financial misrepresentationcases companies saw fit to undertakean internal investigation, but in only84% of these cases did they informtheir Boards of Directors and in only50%, their Audit Committees.
• According to survey findings, companiesrespond inconsistently when theyuncover incidents of fraud. Seniormanagers are less likely to be dismissed
or have criminal charges brought againstthem than are other employees, despitethe greater financial and ‘collateraldamage’ that acts of fraud committedby senior managers can cause.
• 47% of the companies that sufferedfraud managed to recover at least some of their assets. In the case ofcompanies that had taken out insurance,the rate of recovery increased to 59%.
7 Fraud in the future: an illusion of safety?
• Despite the growing number ofcompanies reporting fraud year-on-yearin our surveys, only 21% of thoseinterviewed consider it likely that theircompany will be a victim of fraud overthe next five years.
• Companies that have been victimsbefore are more sceptical of theirchances of not being victims again.90% of companies that had no fraud to report thought it unlikely they mightsuffer it in the future. This declined to 67% for those that had alreadyexperienced fraud in their organisation.
3
45% of companies worldwide have fallenvictim to economic crime in the past twoyears – an 8 percentage point increase onour previous survey
If we compare our most recent findingsin Europe with our 2001 and 2003survey results, we see a dramaticincrease in the number of companiesreporting fraud
5
1 Fraud – a significant andgrowing threat worldwide
Our 2005 economic crime survey reveals that 45% of the 3,634 companiessurveyed around the world reported being subject to one or more significanteconomic crimes during the previous twoyears – an 8 percentage point increase on our 2003 survey. This increase is notlimited to one or two countries, but hasoccurred in every region2.
With the exception of Africa (wherereported levels of fraud were significantlyhigher), according to our analysis,approximately 40% to 50% of companieswere victims of economic crime worldwide.
If we compare our most recent findings in Europe with our 2001 and 2003 surveyresults, we see a dramatic increase in thenumber of companies reporting fraud. In Western Europe, we see an overallincrease of 13 percentage points; inCentral & Eastern Europe, this figure has increased by 21 percentage points.
This dramatic rise in the number ofcompanies reporting incidents may be due to a number of factors:
• An increase in the amount of fraudbeing committed3
• The tightening of market regulations in many countries and a resultingincrease by companies in their effortsto demonstrate transparency and goodgovernance by reporting more fraud
• The introduction of more stringentcontrols and risk management systemsleading to companies detecting more fraud
• A decrease in the stigma attached to reporting fraud. In many places,regulators have fostered an atmospherein which it is acceptable to report – and remedy – economic crimes in theinterest of good governance4
1.1 The bigger the company – the harder the fall
Our 2005 survey, just like its predecessor, shows that a company’s size is directly related to the likelihood that it will experience fraud. While only36% of small companies surveyedreported suffering fraud in the past twoyears, 62% of the large companiesreported fraudulent activities during thesame period5.
Figure 1: Companies reporting fraud (worldwide)
Global
Western Europe
Central & Eastern Europe
North America
South & Central America
Asia-Pacific
Africa
34
37
5241
38
7751
3939
% companies
20032005
4537
42
47
41
0 20 40 60 80
Figure 2: Companies reporting fraud (Europe)
Western Europe
Central & Eastern Europe47
26
% companies
2003 20012005
4234
29
37
0 10 20 30 40 50
2 The exception to this statistic is Asia-Pacific, where growth appears static. However, if one explores the results from individual countries within that region, the number of companies reporting fraud variesdramatically from a high of 63% in Australia to a low of 16% in Singapore. For more details, please see the individual Asia-Pacific regional and country supplements.
3 This survey has also seen the introduction of two new categories of fraud: ‘insider trading’ and ‘false pretences’ which may in part account for the increase in reported frauds.4 This is by no means the case in every country. Indeed, in many developing countries, levels of reported fraud have remained static or dropped, suggesting that economic crime may still have a stigma attached to it.5 In this instance, ‘small companies’ refers to those with less than 200 employees nationally and ‘large companies’ those with more than 5000 employees nationally.
6
In particular, large companies reportedhigh incidences of asset misappropriationand financial misrepresentation6, withthese frauds occurring three times moreoften than in smaller companies.
Larger companies also detected a highernumber of economic crimes since 2003,reporting an average of 12 incidents,compared to an average of 5 incidentsreported by smaller companies. Based on our analysis, the reasons for thisdifference may include:
• Greater opportunities for fraud in large companies
– The larger and more complex theorganisation, the greater the devolutionof responsibilities and the greater theanonymity among staff
– In larger companies, fraudsters are more likely to view fraud as
a ‘victimless crime’. They can oftenregard themselves as tiny cogs in bigwheels and can therefore also be lessconcerned about the financial impactof their actions on their employer
• Transactional complexity
– Large companies often undertake a higher number of complextransactions that can leave them opento accusations of unscrupulousness intheir financial dealings
• Better fraud detection systems
– Our survey results show that largercompanies often have the ability to –and do – implement a greater numberof controls and risk managementprocedures than smaller companies,thereby increasing their chances ofdetecting fraud7
• Threats arising from internationaloperations
– Larger companies often pursue agreater number of opportunities innew and unfamiliar markets (bothdomestic and overseas), increasingtheir risk of fraud in these areas
– Our survey of companies with officesin the Peoples’ Republic of China
revealed that only 8% of themreported suffering additional fraudbecause of activities in the region8. In 75% of the cases, this wasattributed primarily to a lack ofunderstanding of foreign businesscustoms and ethics
There is a saying that “opportunity makesthe thief”. According to our survey findings,where companies considered themselvesto be in a dynamic period of change theywere 20% more likely to suffer fraud thanthose that perceived themselves as beingin a stable period. In our experience,phases of instability can also weakencontrol and precautionary measures – andprovide unexpected opportunities for fraud.
1.2 No industry is immune
Again, like its predecessor, our 2005survey shows that no industry is immunefrom the risks of fraud.
In previous years, we explored theconcept – reflected in the survey results –that ‘regulated’ industries9 reported moreincidents of fraud as their procedures andsystems required greater levels of
Figure 3: Size of companies reporting fraud (by number of employees)
More than 5,000
1001- 5000
201-1000
up to 200
45
% companies
62
54
36
0 20 40 60 80
6 As well as money laundering in the financial services sector.7 Despite their investment in control systems, many larger companies reported that the complexity of their organisation meant that they actually had insufficient controls in place, hence the high number of reported frauds.8 This low number may be due to the fact that fraud lies undetected in China.9 In these cases, ‘regulated’ industries refers to those that have a ‘regulated’ production or services process, such as pharmaceuticals, telecommunications, energy and financial services.
7
transparency. The financial servicessector, for example, has always dominatedthe top position in our surveys for thenumber of frauds reported. Their high level of (near) cash assets and complexfinancial transactions make this sectoran obvious target for fraudsters. But theoften-sophisticated risk managementsystems that financial services firms havein place also increase the likelihood thatthey will have greater success in detectingincidents of fraud.
However, the results of our 2005 surveyindicate that ‘unregulated’ industries are showing equal levels of success in
uncovering economic crimes. Our analysissuggests that this is the result of two key factors:
• Public companies – whether ‘regulated’or ‘unregulated’ – are under increasingpressure from financial regulators toshow strong corporate governance and transparency
• All companies – both public and private– are showing a growing awareness ofthe need to promote good governancein order to drive stakeholder confidence
While companies appear to be improvingtheir fraud controls, it is noteworthy thatcompanies in ‘regulated’ industries appearto have benefited from their longerestablished risk management cultures.Close to 40% of regulated companiesreported the recovery of lost or stolenassets compared to 27% of companies in unregulated industries.
Larger companies also detected a higher number of economic crimessince 2003, reporting an average of 12 incidents, compared to anaverage of 5 incidents reported bysmaller companies
Figure 4: Companies reporting fraud (by industry sector)
Retail & consumer
® Financial services
® = ‘regulated’ industry
® Telecoms
Chemical
47
% companies
60
50
46
Services
Construction
® Energy (inc. mining & utilities)
43
45
42
® Pharmaceuticals & biotech 42
Automotive & aerospace
Manufacturing
Technology
41
41
38
0 20 40 60 80
8
2 Types of economic crime
2.1 The perceived prevalence of fraud
Before exploring the types of fraud thatcompanies have suffered over the pasttwo years, it is interesting to comparecompanies’ recent perceptions as to howprevalent individual categories of fraudare with perceptions expressed in ourprevious survey.
With the exceptions of counterfeiting and money laundering, our respondentsregarded fraud to be more prevalent in
Figure 5: Perceived prevalence of fraud (amongall companies interviewed)
Asset misappropriation
*False pretences
Financial misrepresentation
Corruption & bribery
*Insider trading
Money laundering
Counterfeiting
0
19
1929
0
98
76
% companies
* = new category added in 200520032005
2226
15
19
9
0 5 10 15 20 25 30 35
Despite perceptions that financialmisrepresentation and corruption & bribery are not particularly prevalent…the number of companies that reportedsuffering incidents of these two fraudshas grown significantly since 2003
9
2003 than in 2005. At first, this appearssurprising, especially in the light of recentmedia coverage of investigations intocorporate scandals and the increase in thenumber of frauds reported in our survey.However, this view may suggest thatmany organisations believe that, with theincrease in the number of frauds that theyhave detected and with the introduction ofever-more sophisticated controls, they aresucceeding in countering the threats thatthese economic crimes present.
2.2 The different fraudsexperienced
Companies that suffered fraud reported anaverage of 8 incidents during the previoustwo years.
The highest number of reported frauds in this survey appeared in the categoriesof asset misappropriation (62%) and falsepretences (47%). This is not surprising as these are among the easier frauds todetect because they involve the taking ofitems with a defined value.
However, despite respondents’ perceptionsthat financial misrepresentation andcorruption & bribery are not particularlyprevalent in their business communities,the number of companies surveyed thatreported suffering actual incidents of these
two frauds has grown significantly since2003 – more than doubling in the case of the former. This may reflect a generalincrease in these crimes; it is also likelythat, due to the legal and regulatorypenalties attached to them, there has been a move by senior management toroot them out where they occur in orderto demonstrate good self-governance.
Typically, incidents of corruption & briberyhave shown a regional bias. They are mostprevalent in the developing markets ofSouth & Central America, Africa, and Asia-Pacific, where such acts are often viewedas accepted practices in conductingbusiness. Increased pressure from
developed markets is forcing a number ofcompanies to promote awareness of thedetrimental impact of these practices. As aresult, many companies operating in thesemarkets are now taking steps to reviewtheir protocols.
It is also interesting to note that thedeveloped and regulated regions of NorthAmerica and Western Europe do notreport high levels of corruption & briberybut do report high levels of financialmisrepresentation – the exact opposite of their ‘sister continents’, South &Central America and Central & EasternEurope. As corruption & bribery havebeen identified – and in many casesaccepted – in North America and WesternEurope as bad business practices, theeye of the regulator has now turned toeradicating another form of ‘corruption’:that within corporate accounting.
Figure 6: Incidents of fraud (by companies that reported fraud)
Asset misappropriation
*False pretences
Financial misrepresentation
Corruption & bribery
*Insider trading
Money laundering
Counterfeiting
0
10
2414
0
2519
73
% companies
* = new category added in 200520032005
6260
47
24
4
0 20 40 60 80
10
3 The cost of economiccrime
3.1 The financial damage from‘tangible’ frauds
When estimating the immediate financialcost of fraud, our survey asked companiesabout the three categories of fraud thatinvolve loss of tangible items to which it is possible to attach a value: assetmisappropriation, false pretences, andcounterfeiting10. 1227 companies were able to provide an answer11.
More than 10% of smaller companiesreported losing more than US$ 1 million inthe past two years due to ‘tangible’ frauds.In addition, 6% of larger companiesreporting fraud revealed that they had lostin excess of US$ 10 million through thesetypes of economic crime during the sameperiod. While many larger companiesregard these types of fraud as an inherentrisk of conducting business, the lossesincurred are a clear threat to their potentialprofits. For smaller companies, suchlosses pose a genuine threat to theircommercial success.
The financial damage companies sufferas a result of ‘tangible’ frauds such asasset misappropriation may be only thetip of the iceberg. The ‘collateral damage’from these types of fraud can also besubstantial – as this report will show.
3.2 The penalties from regulators
Financial misrepresentation, corruption &bribery, money laundering, and insidertrading are categories of fraud for which it isdifficult to estimate an immediate financialloss. However, in our experience, theirimpact upon confidence within the businesscommunity can be substantial. And thepenalties from regulators for transgressionscan have a crippling financial impact.
PricewaterhouseCoopers’ SecuritiesLitigation Study12 reveals that in the USin 2004 120 accounting-related securitieslitigation matters were filed againstregistrants on US exchanges, 20 of whichalso involved some criminal or Departmentof Justice (‘DOJ’) investigations. Thesecases were not limited to US companies.Foreign private issuers were also affected:22 companies from overseas facedaccounting-related filings, 8 of whichinvolved criminal or DOJ investigations.
It is noteworthy that the top 5 shareholderclass action settlements of all time eachinvolved some sort of criminal investigationand/or indictment or guilty plea. Thosecases have settled for almost $20 billion
Figure 7: Financial losses from ‘tangible’ fraud
up to $10k23%
$10k to $50k21%$50k to $250k
28%
$250k to $1 million15%
$1 million to $10 million11%
more than $10 million3%
10 The other types of fraud surveyed involve the altering of accounts and values or the disguising of the proceeds of crime and it is therefore difficult – if not impossible – to attribute a direct, financial loss to their actions.11 This is a 50% increase over 2003. In our 2003 survey, respondents were asked to provide the estimated value lost from all categories of economic crime.12 The PricewaterhouseCoopers Securities Litigation Study (published annually since 1997) analyses all US securities litigation cases in a given year. For more information or copies of the report, visit www.10b5.com.
Asset misappropriation, false pretences, and counterfeiting
The average loss per company surveyed = US$ 1,732,253
The total loss by companies surveyed= in excess of US$ 2 billion
More than 10% ofsmaller companiesreported losing morethan US$ 1 million in thepast two years due to‘tangible’ fraud... Suchlosses can pose agenuine threat to theircommercial success
12
dollars in civil suits – not including theSecurities and Exchange Commission(‘SEC’) cash settlements.
The US SEC and the US DOJ have alsobeen supported in their activities by theForeign Corrupt Practices Act and theSarbanes-Oxley Act. With the goal of compelling companies to eradicatecorruption and financial fraud, both theseActs have had a profound influence on thecorporate conscience, and played a keyrole in the drive toward greater corporatetransparency. In turn, many of the world’sregulatory bodies are choosing to emulatethe US – and some are adopting evenmore draconian measures.
3.3 ‘Collateral damage’: beyondthe financial consequences
While quantifying the financial damagefrom fraud is hard, it can be even harder to
estimate the ‘collateral damage’. Yet 40%of the respondents reported significantdamage to their brand or reputation, adecline of staff morale or impaired businessrelations. Each of these elements is criticalto the success of any business and all canbe undermined by the occurrence – or eventhe perception – of fraud.
With the revelation that many companiessuffered repeated occurrences of fraud –on average 8 times – during the period ofthis survey, management should be awarethat exposure to such issues can seriouslyundermine staff loyalty, raising questionsabout a company’s governance and thequality of its leadership. This can lead todemoralisation among staff and, in somecases, lead them to copy the actions of perpetrators.
A company’s management of its brandcan have a significant impact not only on the likelihood of fraud, but also on its ability to limit damage should fraudoccur. Employees who have no emotionalinvestment in the fortunes of theircompany are more difficult to motivate.Conversely, employees who believe intheir company, its mission and products,and in the competence and fairness of itsmanagement, are easier to supervise andmotivate. They are also much less likely
to defraud ‘their’ own company. So whenmanagement introduces anti-fraud valuesand an ethics code into its brand – andthese are understood and supported by employees – their employees oftenbecome the best guardians of thecompany brand and its ethics13.
Irrespective of the type of incident, smallercompanies reported suffering greater‘collateral damage’ than larger companies,with 51% of them reporting significantintangible damage compared with 39% of larger companies. This, again, isunsurprising. With a smaller work force andclient base, a negative reaction from eitherof these segments in response to a fraud,combined with its impact upon the brandand reputation, can have a critical – andsometimes fatal – effect on the business.
When asked to consider the level ofintangible damage from each type of fraud,a high number of companies regarded
Figure 8: Types of ‘collateral damage’experienced
Brand reputation
Business relations
Staff morale 54
% companies
43
42
0 20 40 60
Figure total more than 100% as respondents were able to provide multiple answers
13 David Baral and John Wilkinson, “Economic Crime: beyond the financial costs”, re: Business, March 2004.
Year Number of Accounting accounting cases involving cases filed criminal activity
2004 120 20
2003 117 15
2002 161 43
2001 107 13
13
insider trading (62%), corruption & bribery(49%), and counterfeiting (49%) as causingthem serious ‘collateral damage’.
• In the case of insider trading, this isnot surprising since it damages theintegrity of a company and thoseinvolved in its financing
• The high level of damage associatedwith corruption & bribery is also notsurprising, given the intense recentmedia coverage in this area
• As for counterfeiting, any company canface serious threats to its brand and itsbusiness relations if fake goods enter themarketplace – but this can be particularly
damaging to those companies involvedin the manufacture of products withhealth and safety implications
In most cases, companies reported thatgreater ‘collateral damage’ would resultshould the fraud that had occurredbecome known to the media and publicrather than just the limited community ofbusiness partners and clients. This viewmight be based on two factors:
• The media’s intense interest in goodcorporate governance and its bulldog-like qualities in reporting on companiesthat have ‘slipped-up’
• Many business partners and clientsmay be aware that companies onoccasion make mistakes and may bemore inclined to ‘forgive-and-forget’should management take immediatesteps to correct the situation
Figure 9: Companies reporting collateral damage (by fraud category)
Asset misappropriation
Financial misrepresentation
Corruption & bribery
Money laundering
Counterfeiting False pretences
Insider trading
70%
32%
41%
44%
62%
15%
50%
49%
60%
50%
40%
30%
20%
10%
0%
40% of the respondents reportedsignificant damage to their brand or reputation, a decline of staff moraleor impaired business relations
The bitter experience of half of the companies surveyed was that the perpetrators of fraud were fromamong their own staff
15
4 Fraud’s perpetrators
The bitter experience of half of thecompanies surveyed was that theperpetrators of fraud were from amongtheir own staff14. While disappointing, this is not surprising, as fraudstersoperating within a company have a strongunderstanding of the business, includingthe strengths and weaknesses of thecontrols in place to prevent fraud.
4.1 The greenhouse effect –exploring the environmentsthat propagate fraud
The development of internal control andrisk management systems is important
in managing the risk of fraud, but theycan only go so far before they becomecomplex and unwieldy – and, importantly,before they create an atmosphere ofdistrust. Companies that classified theirprevention attitude as control-orientedrather than trust-oriented reported ahigher number of frauds15.
An employee’s affinity with the company is often brought into the discussion as a means of fraud prevention. Somecriminological theories, such as social bondtheories ask not why an individual turns tocriminal activities but rather why the majorityof people do not. Such theories lay particularstress on the importance of personalattachment to other individuals or institutions.
From a criminological viewpoint,individuals’ affinity with the company andits brand can represent an effective fraudprevention strategy. While an atmosphereof anonymity and distrust within anorganisation can increase the likelihoodthat employees will engage in criminalbehaviour, strong social and emotionalidentification with the company can protectit, just as shared values and beliefs do.People who identify with their organisationare less likely to damage it as thepsychological barriers to this are higher.
Before someone can commit fraud, it isgenerally accepted that three conditionsmust exist:
• The individual must have an incentive(or cause) to commit fraud
• The individual must identify anopportunity to commit fraud
• The individual must be able torationalise (at least to himself or herself)the reason for committing fraud
Respondents who remembered thedetails of individual cases of fraud withintheir companies16 were asked tocategorise the perpetrators’ incentives,opportunities, and means of rationalising
Figure 10: Fraudsters’ relation to the company
Internal prepetrator
External prepetrator
Customer/client
% reported frauds
50
50
30
Business partner/supplier
Service contractor
Other relation to the company
6
18
12
No business relations/anonymous perpetrator
34
0 20 40 60
External perpetrator
Figure 11: The fraud environment
Incentive
Fraud
Opportunity Ability torationalise
14 The only significant difference was in the financial services, where 64% of the perpetrators were external to the company.15 48% of companies that operate a control culture reported fraud, compared with 40% of companies operating a trust culture.16 Since an answer that refers to a specific perpetrator and incident is more reliable than one that is only a hypothetical assessment of the causes of fraud, only answers concerning concrete incidents were analysed (1,821 cases).
16
their crimes. Their answers highlightedthe following reasons that fraud was committed:
• The perpetrator’s need to maintain anexpensive lifestyle (39%) – an incentive
• The company’s lack of internal controls(41%) – an opportunity
• The perpetrator’s low temptationthreshold (50%) or lack of awarenessthat what he or she was doing waswrong (52%) – a means of (sub-conscious) self-rationalisation
Among these reported cases, otherreasons for committing fraud – such as the perpetrator’s dissatisfaction with the company (14%), occupationaldisappointment (13%), or the levels of anonymity amongst the staff ormanagement (13%) – appear to haveplayed a less significant role. However,ignoring these factors in the developmentof a company brand or risk managementsystem can prove dangerous as they canaccumulate and join with other motivationsfor fraud. Socio-psychological studiesconfirm that individuals give foremostimportance to the way they are treatedand that fairness matters to them evenmore than material advantage17.
Collaboration with external parties playeda role in one third of the cases and was a particularly significant factor (up to46%) in Africa, South & Central America as well as in Asia-Pacific and Central &Eastern Europe. In the cases whereexternal perpetrators were involved, the following causes of fraud were citedmore frequently:
• A lack of awareness of wrongdoing (60%)
• A lack of understanding of the financial consequences to the targetcompany (30%)
• A different set of foreign businesscustoms/ethics (26%)
4.2 Profiling the fraudster
The typical perpetrator was male (87%),between the ages of 31 and 40 (38%) andeducated to degree level or higher (52%).
While fraud is perpetrated by all levels ofstaff within businesses, what is perhapsstartling is the extent to which our surveyshowed members of senior management– the figureheads within a business – are incriminated in frauds: Overall, theyare responsible for 23% of reportedfrauds and, in smaller companies, theycommitted 35% of the frauds reported.
It was reported that, once discovered,perpetrators within senior managementappeared to have been driven by theincentive to maintain expensive lifestylesand claimed that they were unaware theywere committing any wrongdoing.
Figure 12: Reasons for committing fraud
Incentive
Expensive lifestyle to maintain
Dissatisfaction with the company
Career disappointment
Layoff/redundancy
% reported frauds
39
14
7
14
Insufficient controls
External collaboration
Management over-ride
Internal collaboration
Anonymity within the company
Foreign business customs
Lacking awareness of wrongdoing
Low temptation threshold
Self-denial of consequences to company
36
41
25
22
13
52
16
50
26
0 20 40 60 80 100
OpportunitySelf-rationalisation
Figures total more than 100%as respondents were ableto provide multiple answers
17 The following causes were quoted significantly more frequently in the case of external perpetrators: lacking awareness of wrongdoing 60%, denial of (or lack of care for) financial consequences to the company30%, different foreign business customs/ethics 26%, collaboration with other external parties 43%.
17
However, because of their position within the business, they had had theopportunity to use their managementauthority to override controls designedto detect fraud.
It is little wonder that the financial and ‘collateral damage’ from fraudincreases the higher up the companyladder a perpetrator operates.Respondents perceived the impact from
fraud perpetrated by senior managementto be up to three times more serious thanthe impact from fraud committed bylower level employees.
Furthermore, the type of intangibledamage inflicted largely depends on the perpetrator’s position. The higher the status of an internal perpetrator, the more frequently companies report a loss of reputation (up to 43%) andimpairment of business relationships (up to 50%). Workforce motivation, on the other hand, is most frequentlyaffected by fraud committed by middlemanagement and employees (58%).
Figure 14: Reasons for committing fraud (by position in company)
Expensive lifestyle to maintain
Lacking awareness of wrongdoing
Management override
Foreign business customs
% reported frauds
5042
32
5753
51
4733
15
3016
8
0 20 40 60
Middle managementOther employees
Senior management
Figure 13: Fraudster profiles
Gender
Male
Female
Over 50 years
41 to 50 years
% reported frauds
87
13
31
9
31 to 40 years
Up to 30 years
Post-graduate
1st degree
High school
Senior management
Middle management
Other employee
22
38
18
34
48
31
24
46
0 20 40 60 80 100
AgeHighest level of educationPosition
While fraud is perpetrated by all levels of staff… what is perhaps startling is the extent to which our survey showed members of seniormanagement are incriminated
5 The effectiveness offraud controls
The means by which fraud is detected canbe split into two broad categories: detectionthrough chance and detection through riskmanagement controls and systems.
In most cases, the internal audit functionwas the most successful ‘control’ indetecting economic crimes. In our opinion,this is not surprising since day-to-dayanalysis of company accounts can oftenbe successful in detecting unusual andsuspicious transactions (and all the moreso if it is supported by a comprehensivesuite of risk management systems, as weshow later).
However, the fact that fraud was detectedby chance in over one third of cases iscause for concern18, particularly as manyrespondents to our survey were confidentthat their existing risk managementsystems would lessen their risk from fraudover the next five years.
The way in which a crime is initiallydetected often depends on theperpetrator’s relation to the company.Crimes committed by internal perpetrators
are most frequently uncovered throughinternal tip-offs or the internal auditprocess. External perpetrators are mostoften detected from external tip-offs,effective risk management systems, andgood corporate security.
In addition, the probability of uncoveringeconomic crime – as we shall show – isstrongly dependent on the number andeffectiveness of the control mechanismsthat are implemented. For example,
• Companies that had implemented astrong, internal audit process increased
the probability of uncovering economiccrime by over 10%
• Companies that had introduced awhistle-blowing system were significantlyless dependent on external informersand/or external accountants19
When looked at individually, each controlmay not appear to be particularlysuccessful in detecting fraud, but whenthese processes are layered on top of oneanother, the resulting risk managementsystem proves to be considerably more effective.
Clearly, a reliance on luck is no basis fora strong anti-fraud regime. The earlier the crime is discovered, the lower the riskof damage and the higher the probabilityof recovering lost assets. We advise that companies:
• Assess the real risks and vulnerabilitiesto fraud within the organisation
• Proactively monitor risky areas
• Develop policies to encourage (and protect) ‘whistle-blowers’
• Actively communicate the company’sstance on fraud – and ‘walk the talk’
• Expect the worst and be prepared bydevising a robust fraud response plan
Figure 15: Means by which fraud was originally detected
Accident/chance
Internal tip-off
External tip-off
Internal audit
Other ‘chance’ means/accident
% reported frauds
17
11
26
6
Law enforcement investigations
Corporate security
Whistle-blowing hotline
Change of personnel/duties
Risk management
Other systems
4
4
3
3
3
23
0 5 10 15 20 25 30
Controls/processesOther
18
18 Internal tip-off 17% + external tip-off 11% + other accidental means 6% = 34%.19 Where whistle-blowing systems have been successfully implemented, corruption & bribery have been detected much more frequently in both Africa (18%) and Asia-Pacific (12%).
The fact that fraud was detected by chance measures in over one third of cases is cause for concern
5.1 Communicating thecompany’s stance on fraud
Companies can encourage employees to act appropriately and report unusualand irregular activities by implementingworkable ethics programmes which,“create a commitment to shared values…develop people’s capacity to engagein moral reasoning, and… create anenvironment that enables responsibleconduct”20. And when explicit norms of criminal law are incorporated into an ethics code its effectiveness isdefinitely increased, counteracting thefragmentation of values in society as well as in business21.
To achieve any level of success, an ethicscode must be clearly communicated to all employees, and everyone, from theCEO and board to the lowest-rankingemployees, should know what it permitsand what it does not. The ethics codeshould also inform employees about how they can report their concerns andobservations. And for the greatest levelsof success, the code should be directlylinked to the company’s brand values,performance management systems, andreward policies.
As PricewaterhouseCoopers’ CEO, Sam Di Piazza, points out, “People in an organisation pick up quickly on howthe CEO and other senior executives deal with individuals and situations thatmay not conform to the ethical code. The board also has something at stake: It is the responsibility of the totalleadership, including the board, to infusean organisational culture of ethics, andthis challenge includes communicatingeffectively.”22
5.2 The impact of fraud controls
Compared with the 2003 survey, manyrespondents appear to have significantlyincreased their efforts to mitigate the risk of economic crime. The more controlmeasures a company puts in place, themore incidents of fraud it will uncover andthe less likely it is that the company willsuffer significant, ongoing financial and‘collateral damage’.
In conducting the survey, we presented to interviewees a list of 15 controls thatcan help in the detection of fraud andasked them which of these measures had been established in their companies.
We learned that the measures mostcommonly instituted were external audit,internal audit and internal control systems.
The correlation between a higher numberof controls and a higher chance ofdetecting fraud can best be illustrated by comparing two groups within our 2005survey, each of which consisted ofaround 1,800 companies. The first group
20
Figure 16: Most common control measuresinstituted
Group a
External audit
Internal audit
Internal controls
% companies
85
71
69
56
51
External audit
Internal audit
Internal controls
Fraud risk management systems
Corporate security
Whistle-blowing hotline
Regular personnel rotation
Specific training on fraud risks
96
98
96
84
81
61
0 20 40 60 80 100
Group b
Figures total more than 100%as respondents were ableto provide multiple answers
20 Marie McKendall, Beverly DeMarr and Catherine Jones-Rikkers, “Ethical Compliance Programmes and Corporate Illegality: Testing the Assumptions of the Corporate Sentencing Guidelines,” Journal of BusinessEthics, June 2002.
21 Kai Bussmann, “Causes of EconCrime and the Impact of Values”, 2003, (http://www.econcrime.uni-halle.de/publikationen_ecrc).22 “It's All Down to Personal Values”, re: Business, May, 2003.
comprises companies that implementedup to 5 (and on average 3) fraud riskmanagement measures23; the secondgroup consists of companies that hadimplemented more than 5 measures.
Companies with a larger number ofcontrols reported not only uncoveringfrauds more frequently, but also that thefrauds they detected were three timesmore financially damaging. In addition, a higher number of the companies thatimplemented more than 5 measures were able to recover their losses (at least in part).
It is heartening to report that almost halfthe companies surveyed had in excess of 5 fraud risk management controls in
place. However, it is our view that thelevels of reported fraud are, in manycases, only the tip of the iceberg.
The difficulty in adopting a proactive fraudrisk management system is a reflection ofthe deceitful nature of fraud; as a result, the more successful that companies are in developing layers of differing, butcomplementary, controls, the more fraudsthey detect. If companies are serious intheir desire to mitigate not only the financialand collateral threats from fraud itself, butalso the threat of penalties from the ever-growing arm of the regulator, significantlymore layers of control need to be added.
21
23 Other measures were listed, but each measure was implemented by less than one third of the companies within the group.
Group A Group BCompanies with Companies with moreup to 5 controls than 5 controls
Percentage of companies that reporteddetecting fraud 39% 51%
Average number of reported incidents offraud per company 6 9
Average financial loss through fraudper company US$ 812,000 US$ 2,449,000
Percentage of companies that reported (at least partial) recovery of losses 43% 52%
The difficulty in adopting aproactive fraud risk managementsystem is a reflection of thedeceitful nature of fraud
Once a suspected fraudis authenticated, aresponse is mandatoryto deter other potentialfraudsters and to showstakeholders in thebusiness that theorganisation will nottolerate such malpractice
6 Investigating and dealingwith fraudsters
Once the spectre of fraud has been raised,steps must be taken to investigate andauthenticate any such claims. In themajority of countries, once an allegationhad been made, most companieslaunched an internal investigation (81%)and over three-quarters of respondentsreported informing the board of directors(76%). In addition, a high number oforganisations also reported commissioningan external investigator, whether the lawenforcement authorities (63%)24, a lawyer(36%), or a forensic accountant (22%).
In 89% of financial misrepresentationcases, which as we have seen can leadto the most significant financial losses
and penalties, companies saw fit toundertake an internal investigation; in only 84% did they inform their Boards of Directors – and in only 50%were Audit Committees informed.
Once a suspected fraud is authenticated,a response is mandatory to deter other potential fraudsters and to showstakeholders in the business that the organisation will not tolerate such malpractice.
Company’s attitudes to dismissal alsovaried depending on the type of fraud. In the case of money laundering, forexample, companies only exerciseda dismissal in 33% of reported cases.
The range of responses and sanctionsavailable can also depend on whether aninternal or external perpetrator is involved.Internal perpetrators were usually
dismissed (81%), and in most casescharges were filed, whether criminal (47%)or civil (27%). As a dismissal action wasnot possible against external perpetrators,civil charges were brought (36%) or thecase was referred to a prosecutor forcriminal charges (56%); when businessrelations were involved, only 1 in 10companies saw fit to end the relationship.
However, there are many reasons why an organisation may choose not to reporta fraud to an external body or bringcharges. These include:
• The potential impact of negativepublicity on business relationships or staff morale
• The fear of the costs of a drawn-outjudicial process
• The belief that there is little chance of recovering the stolen assets
Interestingly, this survey revealed asignificant difference between the waycompanies respond to senior managementdiscovered to be involved in fraud and theway they deal with other staff members.
Fraudsters within senior management werereported not only to have been dismissedless frequently than other grades of staff,but also to have been subject to criminal
23
Figure 17: Corporate reaction on detecting fraud
Internal investigation
We conducted an internal investigation
Law enforcement officer
Lawyer
% reported frauds
81
63
36
Forensic accountant 22
Other investigator 16
0 20 40 60 80 100
External investigator called
Figures total more than 100%as respondents were ableto provide multiple answers
Figure 18: Punitive actions taken
Warning/reprimand
Transfer
Dismissal
Criminal charges
43
% reported frauds
8
2
51
Civil action
Cessation of business relations 4
Nothing 13
31
0 20 40 60 80Figures total more than 100%as respondents were ableto provide multiple answers
24 Law enforcement officers are informed less frequently in both South & Central America (41%) and Asia-Pacific (55%).
charges less frequently (34%)25. Seniormanagers may be treated more leniently for a number of reasons:
• To curb possible damage to the brandor reputation of the company
• To avoid enquiries into the capabilitiesand character of the seniormanagement group
• To prevent demoralisation of staff
• To prevent senior staff from beingdiverted into investigation activities
However, in almost a third of cases,private, civil charges were brought againstsenior management, showing that somecompanies, at least, do take seriously theneed to recover lost assets.
In our experience, the threat of severepenalty is not a sufficient deterrent to
individuals committing fraud. Rather,potential fraudsters are deterred by arespect for the company’s brand and theexpectation that plentiful, sophisticatedcontrol systems are likely to detect theircrimes. In addition, a consistency in dealingwith frauds when detected, whether byinternal censure or criminal prosecution, is of primary importance, no matter whatthe staff grade. In our experience, signs offavouritism in responding to incidents canlead to a rapid drop in staff morale and thepossibility of further, associated problems.
While many companies – unless governedby a legal requirement – would not chooseto involve the law enforcement agenciesbecause of potential ‘collateral damage’,our research reveals that those companiesthat did involve them actually reportedsuffering less ‘collateral damage’. Thismay be in part due to the recent focus on good corporate governance and thedesire of companies to show regulatorsand stakeholders that they can self-govern in such matters: By instigating an investigation, the company reassuresstakeholders that it pays significantattention to good governance and ethics.
6.1 Recovery of stolen assets
Besides deterring other fraudsters with aprompt and decisive response, recoveringfinancial losses is another important aim forcompanies – and, compared to the 2003survey, companies were more successful in this respect: 47% recovered at least part of their losses, with 27% achieving a recovery rate of more than 60% of theirlost or misappropriated assets. Resultsfor recovering assets were worst in South& Central America and Central & EasternEurope (both with 63% of companiesrecovering nothing), whilst North Americarecorded the best results with 38% of
24
25 When it came to uncovering frauds perpetrated by another organisation, companies had fewer qualms about bringing criminal actions. Where only 34% of companies brought criminal charges against their own seniormanagement, 63% of companies reported referring for prosecution the senior management of another company involved in fraud against them.
Figure 19: Actions brought against fraudsters
Warning/reprimand
Transfer
Dismissal
Criminal charges brought
Civil charges brought
Nothing
% reported frauds
Middle managementOther employees
Senior management
191615
533
778584
3447
54
302628
1397
0 20 40 60 80 100
Figures total more than 100%as respondents were ableto provide multiple answers
companies recording recoveries in excessof 61% of their lost assets.
The recovery rate for fraud can beincreased significantly by insurance.Almost half the companies that reportedsuffering fraud (49%) had taken outinsurance to cover for economic crimelosses, with above-average numbers inAfrica and North America (around 73%)and in companies with a domesticworkforce in excess of 5,000 (58%).
In the case of companies who had takenout insurance, the rate of at least partialrecovery increased to 59% – and forthose that involved external investigators(whether lawyers or forensic accountants),this number increased to 66%. 37% wereeven able to recover more than 60% oftheir financial losses. In contrast to this,only 18% of companies without insurancemanaged to recover more than 60% oftheir losses.
25
Figure 20: Amount of lost assets recovered
61 to 100%
Up to 60%
None 53
% companies
27
20
0 20 40 60
Fraudsters within senior management werereported not only to have been dismissedless frequently than other grades of staff, but also to have been subject to criminalcharges less frequently
7 Fraud in the future: an illusion of safety?
Despite the fact that the number ofreported cases seems to have grown,companies’ concerns over the likelihoodof falling victim to fraud have fallen since 2003.
Our research shows that only 21% ofcompanies consider it more likely thatthey will be victims of fraud over the nextfive years – a drop of five percentagepoints from 2003. This change in statisticsappears to reflect companies’ increasingconfidence in their risk managementsystems. In our opinion this may well be a sign of over-confidence.
Companies that had not suffered fraudduring the past two years consideredthemselves better informed about the
causes of fraud and measures to preventit than those that had been defrauded.Moreover, these same companies alsoreported having fewer control andprevention measures in place than thosethat had suffered fraud, making them lesswell prepared to tackle future risks. Thisstatistic is emphasised by their confidencein their future safety. Only 10% of thosecompanies that had not suffered fraudthought it likely they would suffer in thefuture compared with 33% of thecompanies that had experienced fraud.
In our opinion, it is this latter group that isbest prepared to face the future. With anincreased awareness of the risks, vigilanceand preparedness, they will uncover moreoffences and minimise damage to a largerextent than those companies that considerthemselves to be relatively safe.
The fight against fraud is a constantstruggle. Despite the increase in thenumber of frauds being detected and the effectiveness of risk managementsystems being deployed, there are always individuals or groups of individuals who have an incentive and the ability to rationalise committing fraud and/or who are able to spot anopportunity to circumvent or overridecontrols. Companies must not drop
their guard, but must constantly developcontrols and build on the loyalty of theiremployees to ensure that, even if it isimpossible to eradicate fraud, they do not provide an environment in which itcan flourish.
26
Figure 21: Perceived threat of suffering fraudover 5 years
More likely
Less likely24
% companies
20032005
2126
27
0 20 40 60 80
Only 10% of those companies that hadnot suffered fraud thought it likely theywould suffer in the future comparedwith 33% of the companies that hadexperienced fraud
8 Demographics
8.1 Methodology
This is the third PwC Economic CrimeSurvey and was conducted on behalf of PricewaterhouseCoopers and theUniversity of Halle-Wittenberg by TNS-Emnid in Germany.
The survey was conducted in 34countries between May and September2005. Over 3,634 computer-assistedtelephone interviews were conductedwith CEOs, CFOs and other executiveswho claimed responsibility for crimeprevention and detection within theirrespective companies. More than half of the respondents (52%) are membersof the executive board or companymanagement; 43% stated that their mainresponsibility was in the field of finance.
The companies were randomly selectedwith preference given to the 1,000 largestcompanies of a country and the targetnumber of respondents for each countrywas determined according to its GDP.
Each company was asked to respond to the questions with regard to (a) theircompany in (b) the country in which theinterviewee was located. The interviewswere undertaken in the native language
of each country by native speakers, all of whom had been trained in the specificterminology around fraud, as well asfraud’s various forms and impact.
The questionnaire was devised jointly by PricewaterhouseCoopers and theEconomy and Crime Research Center at
Martin-Luther University, Halle-Wittenberg.The report contains a review of the resultsfrom 1,821 cases of fraud reported by1,321 companies. This enabled theanalysis of their experiences of fraud, itscauses and losses, corporate responsesand recovery actions and the effectivenessof fraud prevention measures.
28
Economic Crime or Fraud
Asset Misappropriation (inc. embezzlement byemployees)
False Pretences (inc.Confidence Game)
Financial Misrepresentation
Corruption & Bribery (inc.racketeering & extortion)
Insider Trading (only askedto listed companies)
Money Laundering
Counterfeiting (inc. productpiracy, industrial espionage)
Generic terms used in this survey to denote wrongful orcriminal activities to or in an organisation, intended to result in the gain of money or benefits for the perpetrator(s).
The theft of company assets (including monetary assets/cashor supplies and equipment) by company directors, others infiduciary positions or an employee for their own benefit.
The intentional action of a perpetrator to deceive those infiduciary positions and make a personal or financial gain.
Company accounts are altered or presented in such a waythat they do not reflect the true value or financial activities of the company.
Typically, the unlawful use of an official position to gain anadvantage in contravention of duty. This can involve thepromise of an economic benefit or other favour, the use ofintimidation or blackmail. It can also refer to the acceptanceof such inducements.
Trading of securities by a person inside a company based on non-public information.
Actions intended to legitimise the proceeds of crime bydisguising their true origin.
This includes the illegal copying and/or distribution of fakegoods in breach of patent or copyright, and the creation offalse currency notes and coins with the intention of passingthem off as genuine. It also includes the illegal acquisition of trade secrets or company information.
Due to the diverse descriptions of individual types of economic crime in countries’ legal statutes,we developed the following categories for the purposes of this survey. The descriptions were readto each of the respondents at the start of the survey to ensure consistency.
8.2 The Global Economic CrimeSurvey Editorial Board
The Global Economic Crime Survey 2005editorial board consisted of the followingindividuals:
PricewaterhouseCoopers Dispute Analysis& Investigations’ Practice
• Claudia Nestler, Partner, Germany Leaderand Survey Sponsor
• Steven Skalak, Partner, Global & USInvestigations Leader
• Chuck Hacker, Partner, US
• James Parker, Global Associate Marketing Director
• John Wilkinson, Partner, Eurofirm andSwitzerland Leader
• Rick Helsby, Partner, Russia Leader
• Tony Parton, Partner, Asia-Pacific and Hong Kong/China Leader
Martin Luther University, Halle-Wittenberg
• Prof. Dr. Kai Bussmann, Chair of Criminologyand Penal Law, (Halle/S., Germany)
• Markus Werle, Economy and CrimeResearch Center (Halle & Berlin, Germany)
TNS Emnid (Bielefeld, Germany)
• Oliver Krieg, Director Social & Opinion
Particular thanks in compiling this report are alsodue to the following at PricewaterhouseCoopers:Denise Browne, Victoria McConnell, Alison Blair, Lynne Rainey, Jane Kotecha andJennifer Cibinic
29
Western Europe 1778Austria 75Belgium 77Denmark 75France 150Germany* 400Italy 150Netherlands 151Norway 100Spain 100Sweden 75Switzerland 125UK* 300
Central & Eastern Europe 476Czech Republic 75Hungary 75Poland 101Romania 75Russia 75Bulgaria 75
South & Central America 226Argentina 75Brazil 75Mexico 76
North America 250Canada 100USA 150
Asia & Pacific 729Hong Kong 101India 75Indonesia 75Japan 101Malaysia 100Thailand 101Singapore 75Australia 101
Africa 175East Africa (Kenya, Tanzania) 75South Africa 100
TOTAL 3634
Figure 22: size of participating organisations
Up to 200
201 to 1000
1001 to 5000 21
More than 5000 24
% companies
26
28
0 10 20 30
Figure 23: industry groups participating
Financial services
Manufacturing
Services 28
28
Technology 10
Trade (wholesale/retail) 17
% companies
17
28
0 10 20 30
* Weighted in the statistics to the country’s target number according to its GDP
9.1 PricewaterhouseCoopers Dispute Analysis & InvestigationsRegion Name Telephone Email
Africa East Africa Jack Ward +254 20285 5214 [email protected] Africa Louis Strydom +27 12 429 0077 [email protected]
Americas Argentina Jorge Bacher +54 11 4850 6814 [email protected] Carlos Asciutti +55 11 3674 3603 [email protected] Steven Henderson +1 416 941 8328 [email protected] Luis Vite +52 55 5263 6084 [email protected] States Steven Skalak +1 646 471 5950 [email protected]
Asia/Pacific Australia Malcolm Shackell +61 2 8266 2993 [email protected] Kong/China Tony Parton +852 2289 2466 [email protected] Deepak Kapoor +91 11 5135 0501 [email protected] Rodney Hay +62 21 5212906 ext 2836 [email protected] Owen Murray +81 3 6266 5579 [email protected] Shao Yen Chong +60 3 4045 3476 [email protected] Subramaniam Iyer +65 6236 3058 [email protected] Charles Ostick +66 2 344 1167 [email protected]
Europe Austria Christine Catasta +43 1 501 881100 [email protected] Rudy Hoskens +32 2 710 4307 [email protected] Emil Vassilev +359 2 9355 200 [email protected] Republic Roger Stanley +420 2 5115 1205 [email protected] Søren Primdahl Jakobsen +45 3945 3135 [email protected] Dominique Perrier +33 1 5657 8017 [email protected] Claudia Nestler +49 69 9585 5552 [email protected] Michael Tallent +36 1 461 9663 [email protected] Fabrizio Santaloia +39 026 672 0531 [email protected] André Mikkers +31 20 568 4778 [email protected] Helge Kvamme +47 95 261 270 [email protected] Brian O'Brien +48 22 523 4485 [email protected] Speranta Munteanu +40 1 202 8640 [email protected] Rick Helsby +7 095 967 6160 [email protected] Jose E Rovira +34 91 568 4373 [email protected] Ulf Sandlund +46 8 555 33607 [email protected] John Wilkinson +41 58 792 1750 [email protected] Kingdom Andrew Clark +44 20 7804 5761 [email protected]
9.2 Martin-Luther University, Halle-Wittenberg, GermanyProf. Dr. Kai Bussmann +49 (0) 345 55-23116 [email protected] Werle +49 (0) 345 55-23119 [email protected]
9 Contacts
30
© 2005 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited,each of which is a separate and independent legal entity. *connectedthinking is a trademark of PricewaterhouseCoopers LLP. Designed by studio ec4 17735 (11/05)
