OCCUPATIONAL FRAUD
Management complacent in the face of an epidemic of corruption
A typical organisation loses 5% of its annual revenue as a result of occupational fraud and a conventional financial audit will not pick up financial statement fraud, writes Michael Barker
Established businesses are often burdened by a veil of complacency — management believes that the business is sound and operates seamlessly. Senior directors often don’t visit key sites; they presume that controls written by an auditor 10 years ago still apply and that staff are up to date with these systems. In most cases, the staff are clueless. Then an incident occurs, often a minor one. An investigative team is dispatched and very soon a far bigger story involving corruption, theft and fraud unfolds. After an initial suspect is identified, panic ensues and others come forward (often looking for the best possible deal from the National Prosecuting Authority). According to the 2016 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners, a typical organisation loses 5% of annual revenue as a result of occupational fraud. The organisation analysed 2,410 cases of occupational fraud across 114 countries (13.4% of these cases occurred in s...
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