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White-collar crime hits more than a third of Canadian organizations

Sean Gladwell/GETTY IMAGES

More than a third of Canadian organizations say they're victims of white-collar crime, according to a survey by PricewaterhouseCoopers LLP.

Yet the reported economic crime rate is consistently lower in Canada than in the rest of the world, PwC notes in a 32-page report to be released Monday.

Thirty-six per cent of Canadian organizations said they were hit by white-collar crime, compared with 37 per cent globally. The Canadian figure is up from 32 per cent in 2011, but significantly lower than in mid-2000s, when the response rate to a similar survey was more than 50 per cent.

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"While Canada sits below the global average, the threats from economic crime continue to evolve," said Steven Henderson, national forensic service leader at PwC in Canada.

More often than not – at 61 per cent of reported crimes – the perpetrator is someone inside the organization. The typical internal fraudster is middle-aged, university- or college-educated, in a middle management job, and with at last 10 years of service.

The four most common crimes in Canada are theft of assets (58 per cent of reported crimes), fraud in the procurement process (33 per cent), accounting fraud (22 per cent) and cybercrime (22 per cent). Nearly half of Canadian organizations surveyed said the risk from computer crime has increased.

PwC pointed out that many organizations either do not report cybercrimes – such as computer viruses, stolen data and phishing – or don't know they've been hit.

"Much of the damage wrought by these kinds of attacks is not disclosed, whether because it is not known, is difficult to quantify, or because it is not shared," according to the report.

Of the organizations reporting a crime, one in 10 said they lost more than $5-million.

The sectors most likely to experience crimes are financial services, retailing and communications.

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Fifteen per cent of Canadian companies said they have been asked to pay bribes, sharply lower than the 28 per cent global rate. Fourteen per cent said they've lost business for refusing to pay.

The global survey involved more than 1,500 organizations in 99 countries, including 100 Canadian organizations.

PwC's Mr. Henderson said the key to combatting crime is for organizations to put prevention systems in place.

"An organization's ethical tone at the top, combined with a robust internal control environment, will result in a strong deterrent to fraudulent behaviour and increase the chances of detecting such activities," he said.

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About the Author
National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More


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