In the recently published Global Economic Crime and Fraud Survey 2018 by PwC, it indicated that a startling amount of Malaysians have little to no insight into any ongoings of corruption and fraud in their company!
The report which was revealed to the press on the 29th of August 2018, was conducted from 21st June to 28th September 2017 – Pre-GE14.
The survey, which was conducted globally…
Had 7228 respondents from 123 participating countries; which of
124 were Malaysian respondents
Some of the key points to note that;
1. 69% Of The Fraud Committed Are Inside Jobs
Yup, that’s right. While we like to think that our fellow Malaysians or colleagues are honest when doing their job, figures show that that might not be the case.
A whopping 69% of the frauds detected and reported in Malaysia are done by an inside-man/woman. This is compared to 51% reported globally.
Worst still, that 32% of the cases were committed by Senior Management.
Imagine trusting someone with power in a company only for them to be pocketing money or stealing information on the side!
Not to mention, these figures are only for cases that have been detected and reported.
It’s a scary thought to think how many more people are they who got away undetected.
2. Bribery And Corruption In Malaysia Is INCREASING
Figures given by the report indicates that there has been a rise in bribery and corruption.
And increase from 30% in 2016 to 35% in 2017 to be exact.
There has been a steady rise in economic crime affecting businesses in Malaysia.
The most significant jump is from 2016 to 2018, where figures almost double – from 28% to 41%!
But why is this the case?
Well, the report stated that there were three main factors.
- 85% Opportunity – This means the lack of control or security by the company that allows for fraud and corruption to easily take place.
- 42% Incentive and Pressure to perform – While this could mostly mean pressure to perform at work (like reaching that KPI goal for the month), it also includes factors outside of work. Like possible gambling debts, rising cost of living or even family-related issues.
- 39% Rationalisation – Like that little devil sitting on your shoulder, rationalizing something can lead people down the dark road. In this case, thoughts like “I’m just borrowing for a while”, “The sum is so ‘sedikit‘, I’m sure the company won’t notice” or even “I hate the company! This is my payback!”.
But the most disheartening point, however, is that…
3. A Significant Amount Of Malaysians Still Remains Unaware Of What’s Going On Around Them.
29% say that they have limited or no insight into any economic crime in their organisation. This is higher than the global figure that sits around 15%-16% – half of our Malaysian figure.
That’s almost 1/3 of the respondents from Malaysia!
According to Sridharan (Sri) Nair, Managing Partner of PwC Malaysia this could be because of the culture and also the hierarchy within businesses in Malaysia.
He also stated that;
Unfortunately this is not the case where what you don’t know won’t hurt you. What you don’t know will hurt here.
On the bright side, however…
The report was done prior to GE14 and with the new Government which is committed to combat corruption and fraud, there might be a change in the future.
The Government plans to amend the Malaysian Anti-Corruption Commission (Amendment) 2018.
They plan to introduce corporate liability as a legal concept.
This means that companies and directors will now be open to liability involving corruption and fraud.
This could be as a ‘kick in the butt’ per say, a move to push Malaysian corporations to establish more stringent anti-corruption and fraud procedures and policies in their companies.
However, as the new Government has just only recently completed their 100 days in Parliament, time will only tell if these changes will work.
For now, the people from PwC Malaysia remain optimistic yet realistic about the future.
I think it (the amendments to MACC Act 2018) certainly would. When accountability is put on board, etc; and corporate liability as a concept is introduced, the tone will rise even higher. That shall translate (across the board) and that should have an impact. And I’m optimistic it would result in some change and improvement. – Sridharan (Sri) Nair.
Having a strong corporate culture advocating zero tolerance towards fraud is important. But without sufficient controls in place organisations risk allowing economic crime to fall through the cracks. – Alex Tan
Let’s hope that there will be better results in the next survey.
What do you think? Tell us in the comments below.
** Click here to read the full report!