Some 71% of Irish companies experienced an increase in economic crime in the last year, compared with the 40% European average found in the PricewaterhouseCoopers (PwC) Irish Economic Crime Survey launched yesterday.
Only 50% of Irish staff caught committing serious internal crimes were dismissed, compared to 57% elsewhere. A fifth of Irish respondents said these internal crimes had cost then more than €3.3m.
The biggest crimes were asset misappropriation, at 71%; financial statement fraud, at 42%; money laundering, at 33%; and serious internal crimes, at 17%.
In every category, criminality levels were higher in Ireland, though this might also be explained by better detection processes. In stark contrast, the Irish ranked lowest when it came to taking legal actions against fraudulent employees.
Billy O’Riordan, PwC forensic services partner, said: “Where fraud has been detected, a thorough forensic investigation should be carried out to support appropriate disciplinary and legal actions against perpetrators. Such investigations would also deter future fraud.
“Organisations need to ensure that when a fraud or economic crime occurs, they have an enforceable and enforced policy where people do not appear to get away with it and the appropriate forensic investigations are carried out.”
Most employers blame the downturn for Ireland’s surge in fraud. They cite unpaid bonuses, difficult sales targets and fear of losing jobs as key in-house crime motivators. The 91 Irish companies surveyed also cited maintaining living standards as a major factor for employee fraud.
Globally, financial statement fraud has more than tripled since 2003. It is the fastest growing form of economic crime. Some 73% of Irish respondents said internal controls had relaxed due to a thinner spread of resources, while 55% blamed management’s greater focus on business survival.
PwC partner Bob Semple said: “No organisation or industry is immune from the threat of fraud.
“In these tough times, the temptation to take part in a fraud may overcome ethical values.”