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
- Joyce associates openly talking about leadership change
- Whanganui’s Sarjeant Gallery to get multimillion dollar extension
- Parent, widow of Pike River casualties fail to force review of decision to drop charges against Whittall
- iPredict decision the work of 'officious aliens' – Crampton
- Bank picks lower home loan rates in 2016
Most listened to
- Tim Hunter on why Veritas is doing it the hard way
- Matthew Hooton on whether Steven Joyce will be the next national leader
- Rodney Hide on why all city planners should be fired
- Nevil Gibson discusses his latest Editor's Insight on films
- The NBR crew throw around some of the week's top stories
- Rob Hosking breaks down the political and economic week that was
- "A tragedy" - David Farrar on his disappointment with Simon Bridges
- New F&P product pipeline exciting, says Macquarie senior investment adviser Brad Gordon
- Taupo Motorsport Park executive director Tony Walker on the park's rebranding
- NZIER senior economist Christina Leung on why she does not think the OCR will hit 2%
- NBR's Cameron Officer talks about the NBR Car of the Year 2015
- John Barnett on Brewer: ‘Boy, has he got a bit to learn’