Most of you who adjudicate on your office practices around the water-cooler or in the smoking room may have known that already. But the KPMG report is based on an analysis of 350 cases of corporate fraud committed in Europe, West Asia, India, and Africa.
Senior managers have access to confidential information, and because of their position, it is easier for them to bypass internal controls, said Deepankar Sanwalka, executive director and head of KPMG Forensic in India.
The typical fraudster is male and between 36 and 55 years old. By the time he starts profiting from his illegal schemes, he has usually been employed by the company for six years or more. He typically works in the finance department and skims the loot off alone.
KPMG found that in 91 per cent of the cases the fraudster committed offence several times before being discovered. In India and West Asia, corruption accounted for a third of the cases, followed by theft of cash and theft of other assets (24 per cent and 17 per cent, respectively).
In most instances, perpetrators exploited weak internal controls. And the comeuppance usually was delivered not because of diligent audits, but by anonymous tip-offs (25 per cent). In fact, the study revealed that only 10 per cent of fraud cases were uncovered by internal controls.
KMPG found that seniority was no constraint for a fraudster. As much as 11 per cent of offences were committed by board members. And since 60 per cent of the fraudsters were members of senior management, weak internal controls and abuse of control accounted for 85 per cent cases of fraud. Three out of ten offences were committed by an outsider, usually in collusion with an employee.
In 46 per cent of fraud cases in India and West Asia, each illegal transaction was worth up to 1,000 euros. In Europe, the corresponding figure was 30 per cent.
No comments:
Post a Comment