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Crime

Unfair play

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Brazil is second in the ranking of purchasing frauds

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n the eve of the World Cup, Brazil has shown it is on the ball even without the participation of football stars like Neymar, Oscar and Fred. However, this title has nothing to do with football and is certainly nothing to be proud of as it refers to Brazil´s ranking in frauds committed by staff in companies´ purchasing areas. The latest edition of the Global Economic Crime Survey published by PwC, PricewaterhouseCoopers, reports that 44% of the 132 Brazilian executives interviewed in the survey mentioned

occurrences of procurement fraud, 15 points above the world average and eight above that of the emerging countries (see table). “Brazil is second in the ranking, behind only Russia, with 52%”, said Leonardo Lopes, director of forensic studies. Brazil was also in a top position in the bribery and corruption section, according to PwC. Its rating of 28% was easily overtaken by Russia (62%) and registered a technical draw with China (39%). Brazil´s position in this particular area was not so bad considering that the world average was 27%. However, other factors should be taken into

account. The first is that there was a rise of 10 percentage points in the reports of cases compared with an increase of three points at global level. The second relates to the old habit of sweeping the dirt under the carpet. Only 30% of crimes are notified to the authorities compared with the international average of 49%. “Generally speaking, Brazilian companies do not like to wash their dirty linen in public. The main punishment is to fire those caught which occurred in 87% of cases,” Lopes said This situation should change with the coming into law on January 29 of the Anticorruption Act (12.846/2013). WORKING WITH THE ENEMYO This legislation lays down penalties ranging from Main economic crimes committed in the corporate world – fines of 0.1% to 20% of the % of replies by those interviewed gross revenues of compaglobal Latin emerging BraZil BraZil nies involved in corrupt average America countries 2014 2011 acts against public bodAsset 69 74 71 72 68 ies. “The new law should misappropriation encourage companies´ compliance,” said Martin Procurement 29 27 36 44 ­­-Head, partner and leader fraud of PwC´s Forensic Services, Bribery and 27 25 38 28 18 referring to the corporate corruption areas responsible for enAccounting fraud 22 19 22 25 11 suring that legislation is fully complied with. Cybercrime 24 20 22 17 32 Source: Global Economic Crime Survey 2014 - PwC

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PIB ed25 english  

PIB Edition 25 March/April 2014

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