Fraud becoming a big issue for Irish and European firms
Thursday November 19 2009
FRAUD is a growing problem for Irish business but the levels of crime are no worse here than elsewhere in Europe, according to a PricewaterhouseCoopers survey of 3,000 respondents in 54 countries and the Paris-based INSEAD business school.
Nearly three-quarters of Irish respondents to suffer from economic crime saw an increase in the crime last year compared to 40pc in Western Europe. Some 26pc of all Irish respondents said they experienced such crime last year, similar to Western European levels. A fifth of Irish respondents said the loss caused by the crime was more than €3.3m compared with 8pc in Europe.
The most common types of fraud in Ireland were theft, financial statement fraud and money laundering although market fraud and intellectual property infringement were also significant. "The survey suggests that fraud and economic crime is becoming an issue in Irish business, not least as a direct consequence of the downturn," said PWC forensic expert Billy O'Riordan.
"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 that the appropriate forensic investigations are carried out."
The main drivers of fraud were companies' failure to pay bonuses, more difficult targets for employees and fear of losing a job. Fewer management controls and management focus on survival were also factors that increased the likelihood of fraud happening.
"The economic downturn has heightened the pressures and incentives to commit fraud," Mr Semple said. "In these tough times, the temptation to take part in a fraud may overcome ethical values. In an economic downturn, financial targets are more difficult to achieve and individuals may feel pressurised and their personal financial position may be threatened by reductions in pay or layoffs."
In Ireland, half of the most serious crimes were detected by risk management systems and internal audit while a quarter of the fraud was detected by informal tip-offs.
- Thomas Molloy
Irish Independent
