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Source: ONE News -
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A new survey from KPMG shows fraud is continuing to cost New Zealand firms millions of dollars in lost profits.
The two-yearly survey reveals that Australian and New Zealand survey respondents who suffered fraud were likely to have lost $1.5 million on average.
Respondents reported around $300 million worth of fraud - over $200 million in Australia and around $70 million in New Zealand.
KPMG's head of forensics in New Zealand Mark Leishman says this figure is consistent with court-reported fraud but is likely just "the tip of the iceberg".
"Although we have seen some improvement, poor internal control remains the major factor allowing fraud to occur," he says.
Almost half (49%) of the New Zealand respondents had experienced at least one fraud during the survey period.
"It is significant for New Zealand business that the rate of fraud per respondent is higher than the survey average of 45% and that has been the case now for three consecutive surveys," Leishman says.
The top four types of fraud reported across the survey were false invoicing prevalent, theft, bribery and corruption, and lending fraud.
Most fraud is instigated by employees but the motivations differ between Australia and New Zealand.
Leishmans says gambling is the biggest reason for fraud in Australia, whereas in New Zealand greed, lifestyle and personal finances appeared to drive the crime.
Interestingly, while 50% of respondents believed fraud was a problem for business, only 18% thought it was a problem for their own business.
Leishmans says while there has been a sharp increase in fraud prevention, detection and response, firms need to have a strategy in place.
As part of this strategy, he advises firms to seek professional assistance from people who understand fraud risk and how to investigate it.
"According to our findings, 90% of those responsible for managing the risk of fraud don't hold any formal fraud management or investigation qualifications," he says.
For more on the survey, click on the WATCH tab to see
Corin Dann's interview with Mark Leishman.
