One in three New Zealand businesses have been victims of fraudsters, according to a global survey, down from 49.5 percent in 2011, although procurement related fraud is on the rise, reflecting the rebuild of Christchurch and more companies doing business offshore.
PwC's 2014 Global Economic Crime Survey asked more than 5,000 respondents in 95 countries, including 82 kiwis, about their experience with fraud. Of New Zealand businesses surveyed 33 percent said they had been the victim of fraud.
The decline in fraud compared with the 2011 survey partly reflects increased corporate vigilance in the wake of the global financial crisis and high-profile prosecutions including pyramid scheme fraudster Bernard Madoff in New York and Wellington financier David Ross.
"You can infer the lower levels of fraud are because there are more corporate controls since the GFC when they were stripped right back," Eric Lucas, PwC forensic services partner told BusinessDesk. "There are quite reasonable levels of identifying fraud."
He said despite the apparent decline kiwis must "maintain a watchful eye" as increased technology use gave more opportunities for would-be con artists. There had been an increase in tip off procedures, with 71 percent of surveyed companies reporting they had a whistleblowing mechanism within their company.
Procurement fraud had affected 19 percent of local businesses surveyed and ranged from playing favourites with tenders, taking kickbacks from suppliers or contractors and readjusting orders.
"It goes right through the supply chain," Lucas said. "We included procurement fraud for two reasons, partly because of the Canterbury rebuild, and partly because a lot of organisations outsource parts of their business these days."
"We are seeing more cases on the procurement side of businesses with fraudulent activity," he said.
The other 'big five frauds' identified in the survey included 70 percent who had been victims of theft, 15 percent who had experienced bribery and corruption, 15 percent human resources fraud and 11 percent affected by cybercrime.
New Zealand has had a string of high-profile fraud cases in recent years. The Serious Fraud Office brought its investigations of 16 failed finance companies to a close in April last year, and is scheduled to complete the two remaining prosecutions this April. At November last year SFO said it had convicted and imprisoned 14 persons in relation to finance companies, and four people had been sentenced to home imprisonment.
The person most likely to commit fraud is a 31 to 40-year-old man who has been with the company for less than five years and is educated to a high school level or less. Of the organisations surveyed, 70 percent said fraud was committed by an employee of the company.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Sky will take a gamble and put Westworld, aka 'the next Game of Thrones' on Neon
- Warminger stood to gain significant bonus, court hears
- 'Real housewife' lawyers up, accuses Devoy of bullying, defamation
- Where polls stand on the eve of the first US presidential debate
- John Key: I won't take a traditional role after being PM
Most listened to
- FMA counsel Justin Smith QC described Mr Warminger’s background and the pressure he was under to perform
- Media Snapchat: NBR’s Nick Grant ponders the Human Rights Commission’s role in RHOAKL racism row
- ASB's Jane Turner discusses what's behind NZ's widest month trade deficit
- Kathmandu's Xavier Simonet and Reuben Casey talk through the retailer's results.
- BNZ's Kymberly Martin and Massey University's David Tripe on mortgage rates.