Wellington  - Nearly two years of recession in New Zealand appear to have caused a big rise in theft and fraud by middle and senior managers employed by companies, according to a report released on Friday.

Stealing and fraud committed by middle and senior management increased by almost 20 per cent over the last year, the latest PricewaterhouseCoopers Global Economic Crime Survey reported.

It showed that 42 per cent of New Zealand organisations surveyed reported being victims of theft or fraud, and losing an an average of nearly 500,000 New Zealand dollars (370,000 US dollars) each in the 12 months.

In nearly three-quarters of the cases, the offender was an employee, with middle and senior managers the biggest offenders.

PricewaterhouseCoopers forensic services partner Eric Lucas said a shift in the profile of the internal fraudster was "alarming."

In 2007, the survey found that 75 per cent of fraud was carried out by junior staff. That figure had dropped by almost 20 per cent in the latest survey.

"This shift is a cause for concern, as senior staff have the ability to override internal controls and can potentially cause greater financial loss to organisations," Lucas said.

He said that fraud was a widespread and serious problem for New Zealand businesses. The rate ranked the country eighth highest of 54 countries surveyed, behind the Ukraine (45 per cent) and Britain (43 per cent).

Russia had the highest incidence of reported fraud with 71 per cent and Japan the lowest rate with 10 per cent.

The global average for reported rates of fraud was 30 per cent.

Lucas said, "While New Zealand has reported a fairly high incidence of fraud, one possible explanation is that we have good detection systems."

Earlier this week, Transparency International's annual report declared New Zealand the least corrupt country in the world, followed by Denmark with Singapore and Sweden equal third. (dpa)