Reported economic crime in SA hits record levels

File: Asset misappropriation remains the most prevalent form of economic crime, reported by 45 percent of respondents globally and 49 percent of South African respondents. Photo: eNCA / Jason Boswell

JOHANNESBURG – South African organisations continue to report the highest levels of economic crime in the world with the scourge now peaking at its highest level over the past decade.

That is according to accounting firm PwC's biennial Global Economic Crime Survey, released on Tuesday.

South Africa's rate of reported economic crime is at 77 percent, a massive difference compared to the global average of 49 percent. 

Kenya is second on the list at 75 percent while France was third at 71 percent.

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Asset misappropriation remains the most prevalent form of economic crime, reported by 45 percent of respondents globally and 49 percent of South African respondents, the report said.

One of the new categories of economic crimes is "fraud committed by the consumer", which is the second most reported crime in South Africa at 42 percent and is third-placed globally at 29 percent.

The survey examined over 7,200 respondents from 123 countries, 282 of them from South Africa.

"Economic crime continues to disrupt business, with this year’s results showing a steep incline in reported instances of economic crime," said Trevor White, a partner at PwC.

"We believe that these jumps in reported crime are being driven by a heightened state of fraud awareness by respondents, and in this lies the silver lining."

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PwC said while instances of reported cybercrime show a small decrease in South Africa at 29 percent in 2018 versus 32 percent in 2016, it retains its second place in the global rankings.

Accounting fraud, usually perpetrated by senior management and resulting in the largest losses, increased from 20 percent to 22 percent.

Another notable form of economic crime in South Africa is procurement fraud, indicating that the entire supply chain is fraught with criminality.

"When combined with the high instances of bribery and corruption reported (affecting more than a third of organisations at 34 percent), the resultant erosion in value from the country’s gross domestic product is startling," said PwC.

African News Agency

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