A PwC report indiates accounting fraud as the most common crime in Kenya, followed by asset misappropriation, bribery and corruption. Others are money laundering and intellectual property infringement. Photo/FILE
Pressure to meet financial targets and the desire to earn personal performance bonuses are driving many Kenyan employees into economic crimes.
According to a survey by audit firm PricewaterhouseCoopers, companies in Kenya experienced the third highest incidents of economic crimes among 54 countries sampled around the world.
Companies in Russia and South Africa emerged first and second respectively in the survey conducted between July and November last year.
A report, “Economic Crimes in Kenya”, exclusively obtained by the Nation on Sunday, attributed the rise in economic crimes to last year’s economic downturn.
Of the 53 companies surveyed, PwC explained that most of the respondents argued that the recession created more opportunities to commit economic crimes.
“During an economic downturn, financial targets are more difficult to achieve and the pressure on employees at all levels to deliver rises,” says the report. Says the report: “Setting realistic targets and adjusting them during a downturn can help relive some of the pressure.”
Accounting fraud was the most common crime in the country, followed by asset misappropriation, bribery and corruption. Others were money laundering and intellectual property infringement.
The report indicates that many companies were still struggling to detect economic crimes and act on them and that the vice continued to thrive despite the existence of stringent laws.
Most companies revealed that the crime cost them between Sh7.5 and Sh37.5 million over the last 12 months alone. And they were worried that the things would get worse over the 12 months.
The poll was anonymous and no companies were identified, with PwC only mentioning that 32 per cent of companies surveyed were listed, 26 per cent were private and 17 per cent were from the public sector.
“Accounting fraud appears to more prevalent among listed firms. Overall, 63 per cent of the respondents in Kenya reported this form of crime as compared to 38 per cent in 2007,” says the report.
“A further 57 per cent of companies reported cases of asset misappropriation, while 27 per cent complained of bribery and corruption amongst their staff.”
Source: Daily Nation
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