Purchasers account for nine per cent of corporate fraud

3 May 2007
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04 May 2007 | Antony Barton

Procurement employees are responsible for nine per cent of company fraud cases, according to a new survey.

Most fraudsters, 36 per cent, work in finance and 32 per cent work in operations/sales. The study, by KPMG, a provider of audit, tax and advisory services, reveals the typical company fraudster is a trusted male executive who commits over 20 fraudulent acts for up to five years or more.

Men comprise 85 per cent of perpetrators and a fraudster is likely to be between 36 and 55. By the time he begins to commit fraud, the company would typically have employed him for six or more years.

In 86 per cent of cases he will be at management level and in two-thirds of cases he is a member of senior management.

Weak internal controls are to blame for 49 per cent of fraud cases, with 36 per cent achieved through abuse of controls and 15 per cent through collusion.

In 25 per cent of cases, offences are discovered through staff "whistleblowing", with management reviews the second most common means of detection, at 21 per cent.

The study is based on 360 company fraud cases, investigated by KPMG forensic departments in Europe, the Middle East and Africa.


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