Rise of economic crime across Australian organisations

A new survey from PricewaterHouseCoopers (PwC) has illustrated the rising cost of economic crime among Australian businesses.

According to the Australian edition of PwC's '2014 Global Economic Crime Survey', a majority (57 per cent) of Australian organisations reported an incident of economic crime in the last two years compared to just 45 per cent in the last survey. This highlights the need for all firms to ensure the security of their data and information.

Asset misappropriation and cyber crime remain the top two types of economic crime, but the increased amount of procurement fraud in the past two years was of real concern. A third (33 per cent) of Australian organisations experienced procurement fraud and PwC Partner and Forensic Services Leader Malcolm Shackell said this type of economic crime is the hardest and most complex to detect.

"Procurement supply chains have many links. All of the links are susceptible to weakness and offer opportunities for employees and external providers to exploit," he said.

"We see this type of fraud in contracting, inappropriate supplier relationships and the supply and disposal of goods and assets – anywhere the money is flowing."

PwC, in their report, explained it was happening most often around vendor contracts and maintenance and that by preventing it, productivity could improve.

"Organisations need to understand the profile of the people they are most at risk from, internally and externally, to ensure they have the right preventative controls in place," Mr Shackell said.

One way to put safe guarding in place is by investing in secure recruitment software and payroll software. This will enable organisations to have a greater level of security while also "scrutinising contractors and relationships with other third parties".

According to the survey, the majority (51 per cent) of procurement fraud occurs internally, so having software installed that can easily track and trace payments is critical for your business to avoid economic crime.