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Managing Fraud - Businesses need simple, inexpensive preventive measures |
A survey of companies in Australia and New Zealand has estimated that fraud affects half of all businesses. |
Survey responses from around 500 companies last year found that almost half of them had experienced fraud in the previous two years and they had lost a total of more than $450 million. In 44 per cent of the major frauds there was no recovery of the amount stolen. |
The survey found identity fraud one of the most pervasive developments in recent years. Nearly ten per cent of organisations responding reported being a victim of identity fraud in the previous two years. |
This could take a number of forms, including someone borrowing money or obtaining employment using another person's identity, using fake documents to open bank accounts to launder money, or adopting the identity of a legitimate business supplier in order to submit false claims for goods and services not provided. |
More than 40 per cent of firms replying had taken measures to confirm the identity of suppliers, while 70 per cent had taken steps to confirm the identity of employees before confirming their appointment.The most common perpetrators of the major frauds identified were non-management employees, and their most common motivations were greed and gambling. The 'typical fraudster' found in the survey period was a man in his early thirties who had been with the company for about six years. |
To deter fraud, organisations require effective internal control systems and risk management strategies which need to be regularly monitored and updated. |
