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Daily Insurance Industry News
Thursday 20th of September 2018
June 20, 2011

Corporate fraud on the increase

by Gill Montia

Story link: Corporate fraud on the increase

Company bosses, including chief executives and managing directors, are increasingly committing fraud.

According to a global survey from KPMG, board members at divisional, subsidiary and corporate level are currently committing 18% of fraud, up from 11% in 2007.

Employees accepting bribes to sign off inflated project costs and supplier/employee collusion leading to overbilling are two of the most common forms of corporate fraud, and the study also suggests that in the UK, 57% of fraudsters will have been working for their employer for over 10 years, with 50% in senior management or board roles.

Formal whistleblower reports and anonymous tip-offs account for 34% of detected frauds in the UK.

A further 6% are identified due to customer or supplier complaints, and 11% due to issues raised by third parties such as banks, tax authorities and regulators.

Meanwhile, KPMG suggests that “red flag” warnings, such as an employee who rarely takes holidays or who leads an excessive lifestyle, are frequently missed or ignored by firms, particularly since the onset of the credit crisis.

The firm’s EMA forensic investigations network lead, Richard Powell, comments: “The dramatic increase in red flag warning signs of fraud, which are not being noticed or not being properly followed up, is a wake-up call to companies and public sector entities everywhere.”

 

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