!!! FRAUD !!!

Could it be happening or potentially happen in your business?

No business is immune to fraud. But every business can be made a safer place with good controls, procedures, systems and staff oversight.

Fraud is an intentional and dishonest act which involves deception to gain money or some other asset or advantage. Fraud can be committed by management, employees, contractors, suppliers, customers, or a combination of some or all the above; for instance, an employee might knowingly accept a too-high quote from a supplier who is a friend or relative.

The 2020 PWC global survey on fraud which had 5,000+ respondents covering 99 countries / territories, came up with the following results:

• 47% of the respondents experienced fraud in the past 24 months
• The total cost of that fraud was US$ 42 billion
• The top 4 types of fraud experienced by the respondents were:
  • Customer Fraud 35%
  • Cybercrime 34%
  • Asset Misappropriation 31%
  • Accounting / Financial Statement Fraud 29%
• Fraud levels have increased from 30% in 2009 when PWC began the surveys to 47% in 2020
• The main culprits are:
  • External 39%
  • Internal 37%
  • Collusion between internal & External 20%

The main impacts of fraud are:

• Decreased revenue / profitability 34%
• Damage to brand reputation and trust 33%
• Lowered employee morale 29%
• Lost business opportunities 28%

Key Detection Methods

• Business Controls 60%
  • Account Reconciliations
  • Internal / External Audits and Targeted Monitoring
  • Systems including Data Analytics
  • Business Security
• Business Culture 19%
  • Confessions, Tip-offs and Whistleblowers
• Outside of management influence 18%

The good news is that good internal policies, procedures and controls can go a long way to reducing and eliminating customer and supplier fraud, asset misappropriation (mainly employee fraud) and accounting / financial statement fraud.

Into The Blue NZ Limited can help you to complete a risk analysis and implement the required policies, procedures and controls. Furthermore, if cost is an issue Into The Blue has services registered with the Regional Business Partner Network that will allow for up to 50% co-funding for the first three months through the Management Capability Voucher Fund.