Global Fraud Report Finds Effects of Recession Mixed

Sherry Harowitz

A new report on global fraud conducted by the Economist Intelligence Unit and commissioned by Kroll examines trends by sector and by geographic region. Findings are based on responses from 729 executives in 10industries.

Overall, the incidence of fraud year-over-year from the 2008 survey is about the same, but average loss per company has edged up from $8.2 million to $8.8 million. But not all sectors or regions have been affected equally by the recession. Among those surveyed, 30 percent said the financial crisis had caused fraud to rise, while 5 percent said they saw a drop in fraud. Among the financial services sector, more than half of respondents said that fraud cases were up. For the construction industry, fraud is down sharply by more than half its 2008 levels.

Among the other findings:

--One in five financial services companies saw internal controls weakened due to cost cuts.

--90 percent of all respondents said their companies had been victimized by fraud in the last three years.

--Asia-Pacific has the highest incidence of theft of physical assets of any region, and it was up slightly in 2009. For fraud overall, the number of companies experiencing fraud in the region, while still high, dropped from the prior year's 88 percent to 84 percent.

Find the remaining findings from the complete Global Fraud Report Annual Edition 2009/2010.



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