Twenty eight percent of automotive companies surveyed by PwC report experiencing economic crime. This is up slightly from 25% in 2011.
Among the top types of economic crime in the automotive sector, 74% are committed by internal perpetrators, making it the industry with the highest rate of insider crime.
Most internal perpetrators were either senior executives (23%) or middle managers (54%).
Top types of economic crime in the automotive sector include:
- Asset misappropriation (74%)
- Procurement fraud (34%)
- Bribery and corruption (34%)
- Human resources fraud (13%)
- Cybercrime (13%)
"Economic crime results in significant revenue lost as well as impacting employee morale," said Ted Hawkins, partner, PwC US Forensic Services.
"As the automotive industry continues to do business on a global basis, it becomes even more important to implement a fraud risk management strategy to fight against these types of crimes,” Hawkins added. "When automotive companies invest in emerging markets, these types of crime-fighting tools can help to uncover so called kick-back schemes and unethical vendor selection."
Survey results indicate that only about half (48%) of the automotive sector's companies have conducted a fraud risk assessment at least annually over the past 24 months—and 27% haven't completed one at all.
For more information about PwC's Global Economic Crime study, visit www.pwc.com/auto