Four in 10 listed companies in Thailand victims of fraud

The results show an alarming trend of rise in economic crime, ranging from external hacking to internal employee fraud. 

Asset misappropriation was the most common in Thailand, constituting 78 per cent of reported fraud compared with 64 per cent globally.

Employees continue to be the most common perpetrators, accounting for 77 per cent of fraudsters. Although the rate dropped from 89 per cent in the previous study, the fraud profile in Thailand moved from middle management (56 per cent in 2014) to junior staff. Due to increase in authority and responsibility, junior staff members were responsible for more than half of all crimes, up from 36 per cent in2014. 

“Thai organisations need to step up their corporate anti-fraud measures to prevent, detect and combat such abuses,” said Vorapong Sutanont, forensics partner at PwC Consulting (Thailand). 

“This year’s findings reinforce the need to have even stronger anti-fraud systems and better communication to staff that fraud won’t be tolerated. Employee morale also plays a role in fraud risk because disgruntled staff are more likely to cheat their employers.”

About 22 per cent of respondents said they were affected by cyber attacks over the past two years. The findings showed that Thailand’s cyber-crime rate rose sharply in 2014 and 2015, jumping from the fourth to second-highest economic crime compared with the last survey. 

As more companies get involved with the Internet of Things, Vorapong said the risk from cyber threats was expected to further escalate as online attackers used the Internet as the main channel to commit fraud.

Nearly 20 per cent of cyber-crime victims in Thailand reported losses of more than US$100,000 (Bt3.5 million). Another four per cent lost between $1 million and $100 million, the findings showed, highlighting the need for business to have robust IT policies and systems in place.

Among survey respondents, loss of personal identify information is the most damaging outcome of cyber crime, followed by reputation damage and intellectual property loss. 

Bribery and corruption were still a major concern for respondents, with 15 per cent saying they had been asked to pay a bribe in the last two years (compared with 13 per cent globally). 

Thailand’s overall bribery and corruption rate fell 20 percentage points in the survey period, with 19 per cent of respondents reporting corruption compared with 39 per cent in 2014 and 54 per cent in 2011. 

Such a drop is attributed to recent efforts by the government and private sector bodies to combat corruption, including the establishment of a criminal court for state officials and separate regional courts for provincial corruption matters. 

It is expected that the Council of State will pass an executive decree to address corruption by the end of 2016.

PwC’s 2016 global economic crime survey was completed by 6,337 respondents (compared to 5,128 respondents in 2014) from 115 countries (compared to 99 countries in 2014). Thailand’s part in this year’s survey garnered the most ever responses from senior decision-makers, with 261 participants completing the survey compared to 76 in 2014.

Respondents come from a wide range of sectors and represent a mix of listed, private and public sectors. The C-suite made up 43 per cent of the respondents, and another 9 per cent were senior vice presidents, vice presidents and directors.

Of the total respondents, 44 per cent were multinational corporations, 40 per cent represented Japanese companies and 49 per cent were companies with more than 1,000 employees. 

The largest number of respondents were from the manufacturing sector, followed by automotive and financial services.