Incidents of economic crime including corporate fraud, theft and money laundering continue to rise in Canada, according to a global economic crime survey by PricewaterhouseCoopers LLP released Thursday.
Roughly 56% of Canadian companies said that they had been the victim of economic crime in the past 12 months, a 10% increase from 2003 survey results.
Almost a quarter of Canadian firms hit by fraud said their direct fraud-related losses were greater than US$500,000.
In contrast, the survey found only 30% of global respondents to the survey experienced an economic crime, a 13% decrease from the 43% reported in a 2007 survey.
Asset misappropriation and theft of tangible assets was the most common type of fraud affecting 83% of Canadian firms and 67% of international firms who were victims of economic crime in the past 12 months.
Accounting fraud was reported by 31% of Canadian companies and 38% of international firms.
Money laundering, however, was a much serious problem for Canadian firms affecting 28% of firms compared with only 12% of global companies. Global firms had a much bigger challenge dealing with bribery and corruption.
Steven Henderson, PwC's national leader of investigations and forensic services, said, "Companies need to be aware that an economic downturn can lead good people to do bad things. Need comes to the forefront and becomes intermingled with greed and opportunity creating a perfect storm for fraudulent activity."
About 38% of Canadian firms affected by economic crime caught it by chance or were tipped off. An additional 14% of frauds were detected by an internal audit and 17% were detected by preventative fraud risk management activities.
The study found that Canadian companies were almost twice as likely as their global counterparts to detect fraud through electronic means, such as automated reporting of suspicious transactions.
Despite the growing number of whistle-blowing mechanisms, only 3% of frauds in Canada and 7% globally were detected from this detection method.