Slovak companies show little concern for corporate crime
About one third of Slovak companies say they've been the victim of economic crime in the past two years. The survey was done by the consulting firm PriceWaterhouse Coopers and it suggests Slovak companies are less susceptible to economic crime than others in Europe. But as Anca Dragu reports from Radio Slovakia International, this may not be the case.
Although this figure is much lower than in the rest of Central and Eastern Europe, the total direct loss caused by such type of crime in Slovakia has reached 2.9 million USD since 2005.
Jan Vylita the Director of Forensic Services at the Slovak branch of PriceWaterhouseCoopers led the team that completed the economic crime survey in Slovakia. The report is based on interviews with managers from 88 companies doing business in this country.
"The fact that a relatively small number of companies in Slovakia admit they have experienced some form of economic crime does not mean that economic criminality is low in this country. It can be explained by the fact that the level of concern about the risk posed by economic criminality is very low among managers and business owners. In other cases they do not know about practices that are actually a crime because their control systems do not function well. Another explanation is that they do not want to speak about criminal cases publicly because they are afraid of the stigma attached to it."
Vylita says another interesting finding is that all of those surveyed agreed that corruption has been the most frequent form of economic criminality in Slovakia.
The survey shows that 70 percent of those doing some form of economic crime were new employees, mainly men older than 37 years of age and holding a university degree. Only 27 percent of criminals belonged to the top management of companies while a third of them were ordinary workers.
"People who do not identify with the company they work for are the most inclined to commit fraud. Then of course basic greed is a very strong driving force for many people and such people are those who speculate on any lapses in the controlling mechanism of companies. What worries me is that 79 percent of respondents say that they have been unable to recover the loss despite the fact that they took legal action against those responsible for the damage. One possible explanation is that 78 percent of companies in Slovakia are not insured against economic criminality despite the fact that almost all insurance companies on the market offer such a product," said Vylita.
As for the future, Slovak companies seem to be very optimistic in comparison to those from the rest of the world. Despite heightened efforts at regulation and companies' investments in controls, fraud remains a major threat to companies around the world. They are afraid that the threat is evolving from simple theft to more complex schemes involving management and corruption. In Slovakia only 5 percent of companies are worried that such threats may affect them in the next two years. So it might be worth waiting for the next global economic crime survey to see who was right.