…As economic crime continues to disrupt business
By Hilary Mare
NAMIBIAN organisations have taken an active stance in assuming control of the detection of fraud, with the detection of fraud beyond the influence of management at 39 percent, PricewaterhouseCoopers has said.
In a recently released first Namibian edition of a survey titled Global Economic Crime and Fraud Survey 2018, the firm posits that their findings indicate that organisations are making good use of fraud risk management and data analytics to detect criminal activity.
Namibia’s rate of reported economic crime was recorded at 53 percent of the total respondents of 68.
“At the same time, it appears that the environments within organisations have become receptive to trusting internal tip-off processes at 15 percent. This could signify that employees are moving toward a point where illicit activities will not be tolerated, and are willing to stand up for what is right. Companies, too, are becoming less inclined to leave the detection of fraud to chance and have taken a decisive stance to actively combat the scourge of economic crime. 55 percent of Namibian respondents conducted general fraud risk assessments of their own volition,” part of the report reads.
The report further asserts that Namibian companies continue to invest in fighting the challenges that fraud and economic crime introduce into the business dynamic.
“What is very reassuring is that business leaders are taking an active interest in their governance responsibilities and are becoming aware of, or rather want to be made aware of, the effects and issues that economic crime and fraud have on their organisations. 92 percent of Namibian respondents (versus 91 percent of Global and 94 percent of African) told us that the most disruptive incidents of economic crime were brought to the attention of the board executives or governance leaders within their organisations,” the report further states.
Further affirming this, Hans Hashagen, Advisory and Risk Assurance Services Leader at PwC Namibia said: “We believe that these jumps in reported crime are being driven by a heightened state of fraud awareness by respondents, and in this lays the silver lining. After a long malaise, organisations, driven perhaps by a vigilant jury of public opinion, have become wary of not only the afflictions that may affect them but also the negative impact of being seen to be doing nothing. While the tone at the top is still seen as important, visible action from the top has become vital to survival.”
The report also notes that 16 percent of Namibian respondents believe that cybercrime will be the most disruptive economic crime to affect their organisations over the next 24 months.
One of the new entries into the bank of options for the types of economic crimes experienced by organisations for the 2018 survey was that of ‘fraud committed by the consumer’.
“This category was a consolidation of frauds traditionally committed by the end user, including mortgage fraud, credit card fraud, claims fraud, cheque fraud, synthetic ID fraud and the like. This particular crime, which highlights the propensity of the ‘man in the street’ to be a perpetrator of economic crime, makes one look with new eyes at who the victims of economic crime are,” reads the report.
At fourth place in the Namibian ranking (with 39 percent of respondents having experienced this crime) and third place globally, fraud committed by the consumer also saw 10 percent of those respondents indicating that this fraud was the most disruptive type of economic crime experienced, followed closely by procurement fraud (at 9 percent).
This shows the risk for fraud in the supply chain in Namibia. When combined with the instances of bribery and corruption reported at 25 percent, the resultant erosion in value from our country’s gross domestic product (GDP) is alarming.
Confidente. Lifting the Lid. Copyright © 2015