Victims of Economic Crime

A survey carried out by PriceWaterHouseCoopers (PwC) has revealed that fifty seven percent of companies in the country are victims of economic crime.

Mr. Felix Addo, Director of PwC made this known yesterday in Accra at the launch of the survey report entitled, "The hidden cost: an economic crime survey in Ghana."

The report states that businesses in the country are losing out to fraudsters in a big way. Of the 61 organization surveyed, 57 percent said they had been victims of economic crime over the last two years. And if an organization is hit by economic crime, the mean cost per incidence is around $800,000 per hit over a two year period.

The Survey said the greatest risk to companies is from their own employees, managers and those in fiduciary positions rather than from outside. In other words a large percentage (67%) of all economic crimes reported were perpetrated by insiders.

Corruption and bribery was perceived to be the biggest problem in Ghana at 54% according to the survey. The report said most common forms of economic crime at the corporate level were misappropriation of assets (44% of all reported incidents) and financial misrepresentation (23% of all reported incidences).

The survey revealed that the more traditional crimes of embezzlement, asset misappropriation, financial mispresentation, corruption and bribery are bigger problems than the "high tech" crimes of money laundering and cyber crime. Money laundering and cyber crimes recorded 2% and 3% respectively in the survey.

Two thirds of organizations, the survey said, admitted that they could not recover their monies lost through economic crimes. The report said almost all respondents required that economic crimes uncovered must be reported to an internal body.

Looking at the future, only 25% of respondents thought the risk to their organization would be increased in the next five years whereas some 55% believed that the risk would either stay the same or reduce in this period. These expectations were attributed to future internal changes within the organization, economic growth and changes by government regulators.

The report said economic crime is a serious and costly problem in Ghana and added that it is a confinable problem that can be countered by effective controls, a strong culture of prevention and deterrence, and decisive action.

The survey which was conducted in February this year sampled the views of 61 private and public sector institutions on the various aspects of the subject of economic crime. The respondents were CEOs, CFOs and those responsible for detecting or preventing fraud.