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Vienna (pte028/14.03.2003/13:38) - Companies lose more money than previously thought through economic crime according to a study by international consultants Ernst &Young http://www.eyi.com . The study said as much as eight billion euros a year is lost due to criminal activities on the part of employees in Germany.
Martin Goworek from Ernst & Young Vienna told Die Presse that the intensity of economic crime was also applicable to Austria although the scale would be smaller in keeping with the smaller size of Austria's companies. Two thirds of those involved in theft are company employees. In 12 per cent of the cases, employees join forces with outsiders. Every 20th person involved in company theft belongs to higher management.
Goworek said that economic crime had become an issue in Austria following the spectacular fraud at the US blue chip energy company Enron. Nevertheless, Klaus Fischer, the head of Forensic Services sector, said that companies underestimate the problem. "Many companies just don't want to see the problem. Not even every third company checks the data stored on its computer system which can give clues on criminal activity," he said.
A recent Ernst & Young survey on fraud showed that it was not concentrated in any one geographic region, industry or size of organization, 63 per cent of respondents identified asset misappropriation as the worst possible outcome of fraud, while 21 per cent were most worried about financial-statement reporting fraud. Thirteen per cent of cases involved over one million US dollars - enough to seriously impact the profitability, or even survival of an organization.
One interesting discovery was that, despite the electronic nature of most transactions and communications, electronic evidence in fraud investigations was only used in five per cent of cases. The complete study on fraud released in late February can be found at http://www.ey.com/ca .
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