PricewaterhouseCoopers Research Points to High Numbers of Fraud at Thai Companies

Fifty-one percent of Thai companies surveyed reported experiences with fraud in the past two years, according to PricewaterhouseCoopers.

The global consultancy said that worldwide, 45 percent of companies reported financial losses as a result of economic crime over the past two years, up from 37 percent in 2003.

The average cost per business for "tangible frauds" was $ 1.7 million, including asset misappropriation, false pretences and counterfeiting, according to PWC's 2005 Global Economic Crime Survey.

Charles Ostick, a PWC advisory partner in Thailand, said reporting of financial crimes in Thailand is increasing.

"More companies here are reporting financial crimes. They're reporting a higher number of incidents, and in most cases, are detecting these crimes through accidental means," he said.

In Thailand, nearly 80 percent of those responsible for fraud are male, with 41 percent aged between 30 and 40 and more than 80 percent having a college education or higher degree. Some 45 percent were employed by the defrauded company, with almost 17 percent in senior management.

Besides financial damages, 40 percent of Thai companies reported suffering significant "collateral damage" to day-do-day operations, with 40 percent reporting damage to their brand, 47 percent to their relations with other businesses and 60 percent to staff morale.

"Companies here need to tighten their controls to avoid not only direct financial losses, but also damage to intangible assets -- their brand, to staff morale and to relations with customers, suppliers and other business partners," Mr Ostick said.

"This is particularly true in Thailand where damage to workforce morale was revealed as the single most important intangible loss resulting from fraud."

While the number of fraud incidents globally has increased, the PWC survey showed only 20 percent of the companies surveyed viewed it likely they would be hit by fraud over the next five years.

The most common means of detecting fraud was by accident or chance at 34 percent, followed by internal audit at 26 percent. In Thailand, internal audit detected fraud in only 19 percent of incidents reported.