Frauds find easy pickings
Source: The Daily Telegraph
By Bruce Brammall
Date: July 09, 2003
COMPLACENCY has made Australian businesses among the world's easiest targets for fraud and theft, a new survey claims.
Nearly half of Australian companies - 47 per cent - said they had been victims of fraud in the past two years in a survey by international accounting group PricewaterhouseCoopers.
As a region, Africa has been the worst hit with 51 per cent. Australia's region, the Asia Pacific, was third on 39 per cent.
PWC dispute analysis and resolutions partner Malcolm Shackell said Australian business was relying too heavily on ineffective tools to cut fraud and theft.
"Obviously the statistics are saying that we are well up there and there are a few reasons for that," Mr Shackell said.
He said Australian businesses relied too heavily on "intangible fraud prevention techniques" such as workplace codes of conduct and ethical policies.
"It is not best practice and it is not enough."
Specifically, Mr Shackell said Australian companies had been slow to adopt pre-employment screening and the checking of applications of new recruits.
"Business here also lack a robust fraud response plan, covering who you call, who gets involved and who doesn't get involved."
Computer crime had been a significant rising trend in recent years, Mr Shackell said.
"Most employees now have a computer sitting on their desks and 90 per cent of frauds, piracies and thefts that we've been investigating are related to this."
Australian companies had moved to electronic payments in recent years, but often didn't have the internal safeguards to protect themselves.
"There is a perception that business have that their anti-fraud controls are adequate, but the survey shows that is not the case."
The survey found larger businesses were more vulnerable, with 52 per cent of those with more than 1000 employees falling victim in the previous two years.
Only 37 per cent of smaller companies reported fraud during the survey period.
Financial service firms were the hardest hit. One in six banks worldwide uncovered money laundering operations in their business after installing new compliance and control systems.
Asia Pacific countries identified cybercrime (30 per cent), corruption and bribery (27 per cent) and product piracy (24 per cent) as the major causes for concern over the next five years.
About 45 per cent of companies in the region expect theft and fraud to get worse.
"Far from being a victimless crime, fraud can have a material and lasting impact on businesses, affecting their share price and reputation," Mr Shackell said.
"The risks and incidence of economic crime will not drop without substantial actions to tackle its roots.
"Companies that have been fortunate enough not to have suffered from fraud should learn from those companies which have, by investing now in a comprehensive fraud risk management plan in order to withstand the persistent threat of economic crime."
PWC's survey found the average loss from fraud was $US2.2 million ($3.25 million) and that only 20 per cent was usually ever recovered.
Original article: http://seattletimes.nwsource.com/html/localnews/135197759_idtheft08m.html
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