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Fraud a growing problem
In the past three years, four out of five firms have suffered from some form of corporate fraud. One in five companies have suffered from information theft, management conflict of interest, financial mismanagement, internal financial fraud, procurement fraud, and corruption and bribery, as per a report by Kroll in conjunction with the Economist Intelligence Unit.
Theft of physical assets or stock was experienced by 34 per cent of surveyed 892 respondents and average damage for the large companies with an average turnover of $5 billion came out to more than $20 million, with about 1 in 10 losing more than $100 million. And despite Sarbanes-Oxley, nearly half of companies ranked themselves as at least moderately vulnerable to such threats as regulatory or compliance breach (50 per cent), management conflict of interest (49 per cent) and financial mismanagement (49 per cent).
Tougher anti-fraud laws have not only failed to stop wrongdoing. A large proportion of companies feel no safer with one in three now saying corporate fraud is on the increase, and 81 per cent saying their exposure to it has grown.
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