Fraud rife across corporate Australia
Gambling and the growing misuse of online banking have been identified as the major drivers of corporate fraud in Australia, according to KPMG.
KPMG Forensic claims that fraud in Australia costs the economy in the region of $5.8 billon a year, after a new survey released today, found a total of 27,657 incidents of fraud reported by 221 organisations between April, 2002 and March, 2004.
The financial services industry has been singled-out after being targeted by a number of gangs of organised criminals.
“There is an increase in external attacks by the professional criminal operating in groups, [and] recently, one of these gangs tried to get $600,000 out of a superannuation fund,” KPMG forensic director Dean Newlan said.
According to Newlan, 75 per cent of fraud is through internal channels and when it does occur most of the cost is absorbed by the corporation as only 35 per cent of cases are reported to the police.
“The most significant increase in fraud has been in small-to-medium sized enterprises, with 45 survey respondents reporting at least one case of fraud,” Newlan said.
According to Newlan the typical corporate fraud is often motivated by gambling and the sums stolen are often to pay off gambling debts.
“Staff go to some local gambling venue at lunchtime and, having lost, see the opportunity to solve that loss at work,” Newlan said.
In one case where KPMG was called in, an employee of a superannuation fund had stolen $60,000 of contributions to pay a gambling debt.
“Over a three to four-week period, the cashier stole $60,000 of cash contributions to the funds office,” Newlan said.
In another case, at a financial services firm, a receptionist stole $158,000 through misuse of the online banking system.
Newlan said the receptionist had put the correct name into the payee box online, but then diverted the funds into her own account.
“Online banking is secure, but it is the security of the information being putting in that is in question,” Newlan said.
AUTHOR
Recommended for you
AFCA has urged financial advice firms that when recommending a product to clients where it receives any benefits, advisers must go beyond merely disclosing conflicts of interest.
Women still account for less than one-quarter of Australia’s financial advice profession, with only two firms with more than 100 advisers having 30 per cent female advisers.
Questions have been raised regarding the viability of the current Australian Financial Services licensing regime, and the role that licensees have to play in monitoring and supporting the profession.
ASIC has said it is exploring whether there are concerns regarding Macquarie and Equity Trustees for hosting platforms where investors rolled over their superannuation into the Shield Master Fund.
