18 Mar 2013

Money pressures now main driver of fraud - survey

8:44 am on 18 March 2013

Personal financial pressure has replaced greed as the biggest motivation for fraudsters, according to a survey by international accounting firm KPMG.

KPMG's Fraud, Bribery and Corruption Survey questioned 140 companies across 18 sectors and found 48% had experienced at least one instance of fraud past two years. Businesses lost $18.26 million to fraud in 2010 and 2011, 7% percent more than the two years before.

The firm's head of forensics, Stephen Bell, said the main driver of fraud in 2008, before the global financial crisis, was greed and lifestyle factors, followed by gambling and corporate financial pressure.

Last year personal financial pressure was the biggest motivation for fraudsters, possibly reflecting the tougher economic environment.

The survey revealed two thirds of bigger companies, defined as those with more than 500 employees, had experienced at least one case of fraud, while 86% of firms with more than 1000 staff had experienced at least one instance.

However, only one third of companies had anti-fraud and anti-corruption policies and procedures in place.

KPMG forensic services senior manager Blair Bulloch said there seems to be a relaxed attitude to whether a fraud will occur in an organisation in New Zealand and the attitude to bribery and corruption is even more lax.

He said as organisations grow there are greater opportunities for people to perpetuate a fraud and so the amount of fraud also increases.

Meanwhile, Mr Bulloch says New Zealand companies operating in the UK need to be aware of new anti-bribery legislation that came into effect last year.

"If a New Zealand business has a UK business presence and also has operations in Asia, if one of their employees pays a bribe within Asia, the UK can actually prosecute the New Zealand business."

Mr Bulloch says that's despite the fact the bribe did not occur in the UK and may not have influenced any of the decisions in the UK.