PricewaterhouseCoopers (PwC) recently published a global survey with some interesting results regarding global corporate accounting fraud. Those of you investing or conducting business either globally or domestically might be interested in their findings.
Jeff Cameron, our expert in this field puts it this way, “Accounting fraud consists of both fraudulent financial reporting (where the company’s lenders and investors are the victims) and internal fraud or misappropriation (where the company is the victim)…. As a firm, we believe there is a need for more effective internal controls and the related monitoring of those controls – especially in this rough economic climate.”
The survey itself included 3,000 senior executives in 54 countries and found that fraud had grown from 27% to 38% of all economic crimes between 2007 and 2009. The assumption is that this increased fraud can be attributed primarily to the pressure employees face to meet performance targets, retain their jobs, and keep access to funding or financing from outside institutions.
The survey also noted that although organizations have come to expect this kind of corporate fraud, they generally have done little to identify it or change the conditions under which it has thrived. Once the problem gains more awareness, the hope is that corporations will conduct more frequent reviews to uncover the fraud and seek new procedures to combat it.
If you have any concerns about your own company please call us. We will be happy to review your control environment, look for weaknesses and wherever possible help you to implement new controls to deal with issues that we find.