Top Reasons to Buy Crime Coverage
A 2011 PWC survey shows that 32% of Canadian organizations reported being victims of economic crime during the previous 12 months. Almost 1 in 4 of the organizations who experienced economic crime globally stated that they have been subject to cybercrime in the past 12 months.
The Top 4 economic crimes are:
- Asset misappropriation
- Accounting fraud
- Bribery and corruption
40% of economic crime was perpetrated by an external party while 60% was committed by an internal party.
Globally, a typical business organization loses 5% of its annual revenue to occupational fraud. 85% of fraudsters have never been previously charged or convicted for a fraud related offense. 17% of perpetrators are owners / executives, 41% are management personnel and 42% are employees. 50% are employed for more than 5 years.
Culture and Controls are the two leading methods to manage Crime risk.
Three conditions are present when fraud occurs:
- Opportunity – for example absence of controls or ability to override controls
- Incentive / Pressure – the motivation to commit fraud
- Attitude / Rationalization – personal ethics or the idea that the act is justified
When employees perceive a weak ethical culture, misconduct multiplies. Business units will the weakest ethical cultures experienced five times more misconduct that those with the strongest ethical cultures according to the CELC (Corporate Executive Board’s Compliance & Ethics Leadership Council).