Bloomberg News

Canada, Africa Rank Low, High on Kroll Study of Fraud

October 16, 2012

Canada is least prone to business fraud while the nations of sub-Saharan Africa, India and China are some of the world’s most risky, according to an international risk management firm survey.

Seventy-seven percent of the companies in the study doing business in sub-Saharan African countries experienced some form of fraud, theft or corruption, down from 85 percent last year, according to a 64-page report released today by Kroll Advisory Solutions, a unit of Falls Church, Virginia-based Altegrity Inc.

Just 47 percent of responding Canadian firms reported those difficulties, according to the Kroll report, which surveyed more than 830 executives in 10 different industries worldwide.

“Canada is a relatively easy place to do business,” Kroll Chief Executive Officer Tom Hartley said in a phone interview. “The rules apply.”

“That is not true in a lot of markets,” he added.

This is the sixth year Kroll has authorized the survey, which is conducted by the London-based Economist Intelligence Unit.

The study examined crimes including theft of physical assets, intellectual property, corruption, bribery, financial fraud and other wrongdoing in the Americas, Europe, Asia and Africa. Industries examined included finance, retail, health care and pharmaceuticals, travel, construction, consumer goods and technology, which includes media and telecommunications.

U.S. Companies

Sixty percent of U.S. companies reported some experience with fraud, theft or corruption. Of that, 26 percent involved theft, loss or attack upon information, 24 percent comprised physical asset theft and 16 percent stemmed from management conflicts of interest.

Russia finished on par with the global survey average of 61 percent of companies reporting some incidence of fraud and corruption. As in the U.S., 26 percent of businesses there claimed some form of information theft.

Sixty-eight percent of Indian respondents reported some prevalence of fraud, compared with 65 percent in China and Indonesia.

Fraud and theft in China fell 19 percent from last year, when 84 percent of respondents reported they were affected by wrongdoing.

“We were a bit surprised to fee it drop to that degree,” Hartley said, explaining that the results did not correspond with Kroll’s business experience there.

Global concern about fraud and theft is actually declining faster than the crimes themselves, Hartley said. “When you’re hit by a fraud, you’re immediately concerned,” he said, after which businesses will spend money to defend against that threat and move on.

“They get immediately complacent.” Hartley said. “You are more likely than not to be hit by fraud pretty much wherever you are in the world. Except Canada.”

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


Hollywood Goes YouTube
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus