Post-recession era ripe for economic crime: PwC

Cost-cutting and downsizing during a recession can increase the risk of financial fraud in a post-recession landscape era, reports PricewaterhouseCoopers.A PwC Economic Crime Survey shows 56% of Canadian companies reported being victims of crime in 2009.“In a global economic downturn, need comes to the forefront and becomes intermingled with greed and opportunity,” said Sarah MacGregor, a director in PwC’s investigations and forensic services group. “Previous cost-cutting and downsizing efforts can lead to weakened or non-existent controls and ultimately financial fraud.”Companies that do not increase their vigil over economic crime risk negative outcomes such as lower employee moral, disrupted business relations and damage to brand and company reputation, a PwC release says.“People will stop committing fraud if they think there’s a crackdown, particularly when anti-fraud measures are put in place, and communicated throughout the company,” said MacGregor.Some preventive measures private company owners can take include:•    perform timely reconciliations and independent reviews;•    mail cheques immediately after signing;•    prepare an investigative protocal; and•    develop fraud risk indicators as part of your fraud risk assessment.