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Three In Four Swiss Firms Affected By White Collar Crime

by Ulrika Lomas, for LawandTax-News.com, Brussels

18 August 2005

Despite being a taboo subject, white collar crime and other economic offences remain prevalent in the Swiss economy which has affected nearly three-quarters of Swiss companies, both large and small and across a variety of industries.

According to a survey of 250 Swiss companies conducted by professional services firm KPMG between June and July 2005, 73% of the companies that responded reported that they had been the victim of economic crime. The Federal Police Bureau estimates that the damage caused by these crimes is equal to between 2% and 4% of Switzerland's gross domestic product, or more than CHF8 billion (US$6.3 billion).

At 42%, deception offences represent the largest problem, the survey, entitled 'Economic Criminal Activities in Switzerland,' found. In second place came bribery and corruption with 12%. Data theft and the violation of copyright was the third most commonly mentioned crime at 10%.

Internal and external auditing played a central role for 20% of the companies questioned in identifying misconduct and economic criminal activities. In a further 20% of cases, criminal activities were discovered by chance. To be able to reduce economic criminal activities, 32% of the companies surveyed saw a need for action in the field of Fraud Risk Management. 14% stated that there is also potential for optimization in the field of compliance.

"Fraud Risk Management, as part of the internal auditing system, takes on a particular importance with regard to the prevention and discovery of economic criminal activities," Anne van Heerden, head of Forensics at KPMG Schweiz, observed.

"Almost 60% of the companies questioned take the economic criminal factor into account in their Risk Management," she added.

However, despite the high damages figures, 80% of the companies surveyed were only prepared to allocate a prevention budget of a maximum of CHF50,000 per annum, the survey revealed.

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