A report released by advisory firm KPMG on Tuesday reveals that most corporate frauds
are committed by finance directors, chief executive officers (CEO) and other top honchos who have spent more than 10 years in an organisation and not the junior staff.
According to the survey, the global fraud trends suggest that "the typical fraudster
is male (87 per cent), between the age of 36 and 45, holds a senior job in finance, has worked for his company for more than a decade and acts in collusion with a partner".
"Most fraudsters work in their company's finance department (32 per cent), where access to corporate assets, financial reporting and credit lines offers significant opportunity to commit and conceal acts of fraud," the survey says.
The office of the CEO or managing director accounted for 26 per cent fraud and operations and sales accounted for 25 per cent. Some typical examples of fraud include mis-statement of financial results, theft and expense abuse. Some other issues, such as false billings by a supplier to fund kickbacks to a senior employee or employees accepting bribes from a contractor in exchange for signing off inflated project costs, have also come to light.
Commenting on India, the survey says 88 per cent of frauds in the country are not reported and it takes longer time to detect a fraud in India as compared to the US or Europe.
are reluctant to seek legal redress and prefer separating the fraudsters (employees and external parties)," Rohit Mahajan, executive director (forensic services), KPMG India, said. "Action taken by organisations greatly depends on their outlook and tolerance towards fraud as well as their appetite to deal with law enforcement and legal channels," Mahajan said.
Fraud now takes longer to detect - up from an average 2.9 years from inception to detection in 2007, to 3.4 years in the 2011 analysis. In Asia, fraud goes on for the longest period - an average of five years - before being uncovered, and 16 per cent of frauds go undetected for 10 years or more.
The survey conducted by KPMG analyses the pattern of fraud or financial misreporting from 348 cases across 69 countries, selected from the thousands of cases, which KPMG has investigated for its clients. Many of these cases have never been made public.
Courtesy: Mail Today