The report draws on a survey by the Economist Intelligence Unit of 900 senior executives worldwide. It reveals:
- Theft of physical assets or stock, which was experienced by 34% of surveyed respondents, is particularly widespread. In addition, a fifth of companies suffered from information theft, self-dealing, financial mismanagement, internal financial fraud, procurement fraud, or corruption and bribery.
- The average cost due to fraud to large companies – with annual revenues of more than $5bn – was more than $20m, with about 1 in 10 losing more than $100m. More than a fifth of all companies in some sectors had lost more than $1m – healthcare, pharmaceuticals and biotechnology; construction, engineering and infrastructure; and financial services.
- Theft, loss of or attack on information are the biggest concerns to companies when asked how they assess their future risk, with 20% of respondents describing themselves as highly vulnerable. More than 30% believe that IT complexity has increased their exposure to fraud.
- High staff turnover is the most frequent cause of increased exposure to fraud, which is cited by 32% of respondents. Close behind are complex IT arrangements (31%), entry into new markets (28%) and increased collaboration between unrelated companies (26%) – all of which are factors that are closely tied with modern business practice. Entry into new markets is of particular concern for larger organizations (38%).
- The extent of corruption and bribery varies widely from one region to another. The proportion of companies that has recently suffered from it in the Middle East and Africa (39%) is by some distance the highest. But more than twice as many Eastern European respondents (29%) have experienced the problem than those from Western Europe, (14%), and more than three times as many from Latin America (29%) as from North America (9%).
See full Press Release.
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