THE amount of fraud reported in this part of the world has skyrocketed in a recent survey, but the increase is more likely because of increased awareness than a corporate crime spree.
The PricewaterhouseCoopers Global Economic Crime Survey for 2005 saw 63 per cent of the Australian firms surveyed report an incident of economic crime since the 2003 survey. This was up 16 per cent on the 2003 result, and well above the global average of 45 per cent.
Investigation and Forensic partner John Fisk said this was because of increased detection of fraud, rather than an increase in crime.
New Zealand is not included in the survey, but a number of the 101 Australian companies surveyed have operations here. Mr Fisk said trends in Australian fraud tended to mirror those in New Zealand.
"The jump is largely due to better systems in place to detect it, with Australia and New Zealand having some of the most sophisticated systems in the world. But of course there is an element of increasing fraud in there as well."
High-profile fraud cases such as Enron, the resulting Sarbanes-Oxley disclosure requirements and the changing face of fraud thanks to the prevalence of computers had all boosted awareness, he said.
The average reported cost to companies was $2.46 million, which Mr Fisk described as the tip of the iceberg, compared to the collateral loss. "Staff morale, the cost of an investigation, damage to reputation and dealings with clients can all suffer hugely."
Prevention was still the best cure, Mr Fisk said, and companies benefited from having a prevention policy in place.
"For the fraud to happen there has to be the opportunity, the willingness to commit it, and the ability of the fraudster to rationalise what they're doing."
Globally the average of 45 per cent of companies reporting fraud was up 8 per cent from two years ago. The survey interviewed 3634 executives in 34 countries.
It found that the larger the company, the more likely it was to be affected by fraud. Across services, technology, manufacturing and financial services between 38 per cent and 60 per cent of firms reported having been affected by crime.
The typical fraudster is likely to be male, educated and in his thirties.