24 Aug 2009

Employees commit most company fraud - survey shows

9:38 pm on 24 August 2009

A survey from business advisory firm KPMG shows managers remain the greatest fraud risk to a company.

The survey found 28 large frauds took place in New Zealand in the six months to June totalling $20 million. On average, the value of each was $780,000.

More than a quarter of the offences were perpetrated against Government bodies.

KPMG director of forensics Mark Leishman says the vast majority of frauds are carried out by staff.

If successful, managers typically escape with more than three times the amount of money taken by other employees who commit fraud.

Mr Leishman says there is no evidence the recession has increased fraud. Greed remains the main motivation, while gambling is a lesser factor.

The KPMG survey looked at fraud involving sums over $100,000 for which someone has been charged or sentenced. The survey will be repeated in six months' time.

Corporate Risks, a company specialising in investigating fraud, believes the number of cases could climb as as the recession puts financial pressure on employees.

Managing director Russell Joseph says its investigation workload has already increased markedly during the recession and the amount of money involved in frauds ranges from a few dollars to hundreds of thousands.