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PwC: Economic crime in the Czech Republic is increasing, more and more offenders are creeping into companies via the internet

A total of 29% of companies in the Czech Republic were victims of economic crime in the past year, while in 2009, “only“ 24% of companies were in the same situation. As well as elsewhere in the world, Czech companies are also being increasingly targeted by offenders via the internet. This has been shown by 6th year of PwC Global economic crime survey.

The most common type of economic crime in the Czech Republic remains the theft or misappropriation of company property by its employees (75%). Here we are even above the global (72%) and European (69%) averages. The largest percentage of companies was affected by misappropriation and computer crime. A relatively new trend is, however, computer-related crime which is in fourth position (13%) in terms of frequency in the Czech Republic after accounting fraud and corruption (both 21%). Local companies are increasingly aware of the real danger coming from the virtual world. Almost a third of respondents have seen a growth in cybercrime in the previous year and the other two-thirds consider it to be roughly at the same level as in the previous year. More than half (56%) of Czech respondents, however, also stated that their organisation does not monitor the use of social networks, or are aware of it. From the perspective of economic crime, the main threat comes from inside the organisation on the part of employees (67%). This number increased significantly compared to 2009 (50%). The most common external offenders were customers (43%) and suppliers (29%). Czech companies are not afraid to radically strike back against the offenders. The most common response in the case of employees is discharge (81%). Likewise, in 71% of cases the business relationship with external offender has been terminated. This result represents a significant increase against 2009 (30%)and is well above the average of middle and eastern Europe (53%) and globally (39%).

“This result is not surprising, since misappropriation of funds is usually better discoverable than other types of fraud. Totally incomprehensible, however, is the belief of the majority of companies in the Czech Republic that they will not face economic crime in the next 12 months. If we take into account the current development of the world economy which will undoubtedly increase the risk of fraud including manipulation of a company’s financial results, this illusion could very easily evaporate,” says Michal Kohoutek from PwC Česká republika.
The survey was performed in the period of June – November 2011. Its participants responded to the questions regarding their company and country of their business. The survey, in the form of an on-line questionnaire, was completed by a total of 3 877 respondents from 78 countries. This survey is the largest study of its kind in the world.

For further details, visit www.pwc.com/cz/hospodarska-kriminalita.

Michal Kohoutek
+420 251 151 231
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