23 Jul 2010

Relaxed approach could open way for fraud, farmers warned

6:51 am on 23 July 2010

Rural businesses have been advised to take less of a 'she'll-be-right' attitude than they may have in the past, so they don't leave themselves vulnerable to fraud.

Accounting and consulting firm KPMG says large scale corporate fraud is on the rise in New Zealand and the increasing complexity of the agribusiness sector, higher debt levels and the growing level of multiple farm ownership also put rural businesses more at risk.

KPMG's fraud barometer for the past six months has revealed an increase in significant corporate fraud in New Zealand, defined as cases involving more than $100,000.

The survey identified no incidences of fraud in the agribusiness sector at that level.

But KPMG agribusiness partner Ian Proudfoot says it's likely that cases of fraud are going undetected in the rural sector and agribusinesses are becoming more exposed to that risk.

He says increasing level of foreign ownership also points to the need for tighter governance and internal controls in rural businesses.

Rigorous internal control and monitoring is important to ensure the businesses are run in such a way that ensures the owners' interests are protected, Mr Proudfoot says.