Bribery and corruption cases jumped 13 per cent globally since 2011 with engineering and construction sector topping the list, followed by government business, a PwC report said today.
According to the multinational accounting firm, the menace of bribery and corruption will continue to rule the economic crimes chart this year as well.
“Every region reported a significant number of incidences of bribery and corruption. Twenty-seven per cent of all respondents who reported economic crime experienced corruption during the survey period, making it the third-highest crime specified and a relative increase of 13 per cent from 24 per cent reported in 2011,” PwC said in its 2014 Global Economic Crime Survey.
This was third only to asset misappropriation (69 per cent) and procurement fraud (29 per cent), it added.
Also, about 53 per cent of the CEOs surveyed expressed concerns about bribery and corruption, up from 34 per cent in 2011.
PwC said companies that experienced incidences of bribery and corruption “more frequently reported losses of over USD 5 million”.
“These large losses may be connected to the reported increase in incidents of bribery and corruption—frauds which can be especially costly to organisations, with regulatory fines, legal fees and remedial expenses potentially reaching billions of US dollars,” it said.
The survey included 5,128 representatives from over 95 countries.
Sectorally, 50 per cent said engineering and construction was the most affected, followed by energy, utilities and mining (42 per cent) and government (35 per cent).
“One driver of the high reported figures of bribery and corruption may be the megatrend of the shift in wealth from the developed economies of the West to the emerging high- growth economies of the South and East,” PwC said.
This could be because of different cultural attitudes toward fraud and corruption, fewer regulations, and less- consistent enforcement of those regulations, it added.
“These conditions naturally create a higher risk profile for this type of economic crime,” it said.
Africa and Eastern Europe reported the highest overall percentage of bribery and corruption (39 per cent), with the Middle East (35 per cent) also registering above the global average.
“Middle East and Africa have significant resource extraction and infrastructure/construction-based economies, which are traditionally industries with significant fraud and corruption risks,” the report explained.