Low-cadre managers have dislodged their mid-level colleagues in perpetrating rising fraudulent deals in companies, a survey by global consultancy firm PriceWaterhouseCoopers on Friday suggested.
The 2016 Global Economic Crime Survey’s report on Kenya attributed this largely to availability of opportunities, pressure, rationalisation and capacity to take part in economic crimes.
About 70 per cent of reported cases are committed by internal fraudsters, according to the report.
The survey on 99 respondents, including listed companies, private companies and the public sector, puts the level of internal fraud committed by junior management staff at 42 per cent.
Mid-level management, who topped in the 2014 survey, now account for 29 per cent, senior managers 24 per cent, while the remainder five per cent is done by other cadres.
“Most likely characteristics of internal fraudster are male, educated university or college graduates, 21 to 30 years old with three to five years in service,” the report says.
The survey further says companies prefer to sack the culprits, with only 36 per cent of them reported to law enforcement agencies.
Overall, the level of economic crimes in the country has increased to 61 per cent from 52 per cent in 2014, which is above the 25 per cent global average.
Kenya is now ranked third globally on reported economic crimes out of 115 countries surveyed including four in Africa – the others being South Africa, Zambia and Nigeria.
Asset misappropriation – theft or embezzlement of company resources – tops Kenya’s committed economic crimes at 72 per cent, with 68 per cent of respondents expressing concerns they will experience the same in the next 24 months.
It is followed by bribery and corruption (47 per cent), procurement fraud (37 per cent), accounting fraud (33 per cent ) and cyber crime (27 per cent).
“Procurement fraud continues to be the fastest growing economic crime in Kenya which starts mostly at the early stage of bidding,” PwC East Africa’s forensics leader Muniu Thoithi said during the launch in Nairobi.
“A worrying trend in the survey is the low levels of confidence in local law enforcement’s ability to investigate and prosecute economic crimes. Respondents in Kenya were the least confident globally at 79 per cent against a global average of 44 per cent,” he added.
He said the government should strengthen the capacity of law enforcement agencies and enforce existing legislations to tackles economic crimes.