Financial Crime World

Bulgarian Companies Struggle with Fraud: Senior Management to Blame

A recent survey by PricewaterhouseCoopers (PwC) has highlighted a concerning trend in Bulgaria, where senior management is being identified as the primary perpetrator of serious economic crimes. The study, part of the global Economic Crime Survey 2009, reveals that over one-third of Bulgaria’s most serious offences were committed by senior management, compared to just 14% globally.

Senior Management: A Key Factor

The survey highlights a worrying trend where senior managers are setting the “wrong tone at the top” and hindering fraud awareness and prevention efforts. This can have devastating consequences for companies, including damage to reputation, financial losses, and even criminal charges.

The Consequences of Inaction

In order to combat fraud, PwC recommends that companies take swift and decisive action when economic crimes are detected. Staff must understand the consequences of their actions and be aware that detection is certain and inevitable due to sophisticated systems and controls.

Lack of Accountability

The survey also found that Bulgarian companies often fail to adequately address fraudulent activity. In over one-third of cases, perpetrators were either given a warning or reprimand, or the company took no action at all. This lack of accountability can create a culture of complacency and encourage further fraud.

Globally, levels of economic crime have not significantly decreased over the past decade, despite companies’ confidence in their controls limiting exposure to fraud. Bulgarian companies display a similar degree of complacency about the dangers of economic crime, with 4% of respondents believing that it is unlikely or extremely unlikely that they will be affected by fraud.

Combatting Fraud

To combat this trend, PwC advises companies to strive for a culture that supports anti-fraud controls and clear ethical guidelines. Every perpetrator, regardless of their position or function in the company, must be subject to equivalent sanctions. A proactive approach to prevention, combined with a strong anti-fraud culture stemming from top management, is essential for minimizing the risk of fraud.

Conclusion

The full report on economic crime in Bulgaria is available at pwc.com/bg. It is clear that Bulgarian companies must take immediate action to address the root causes of fraud and create a culture that values integrity and ethical behavior.