Procurement fraud fuels business losses

14 September 2008
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15 September 2008 | Jake Kanter

The average revenue companies lost through fraud increased by almost a quarter in the past year, according to a report.

The study of 890 international firms by risk consultancy Kroll and the Economic Intelligence Unit found average three-year loses reached $8.2 million (£4.5 million), compared with $7.6 million (£4.2 million) for the three years ending 12 months ago. It found problems such as supplier collusion and procurement fraud were contributing to these losses, as were other issues such as bribery and theft of physical assets.

The retail sector was the most vulnerable to purchasing fraud over the past year, followed by manufacturing and the pharmaceutical industry. The study said manufacturing companies with operations in Asia are experiencing a high level of corruption.

Blake Coppotelli, senior managing director in Kroll's Business Intelligence & Investigations division, said in a statement: "The findings show that fraud is not only widespread but also growing. Companies need to look carefully at how they can address these issues to reduce their risk to fraud and improve their business operations."



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