Most fraud is an inside job, says survey

Rates of fraud dipped slightly this year, according to a report. But, increasingly, it is being committed by folks right under your nose

By , CSO |  Security, fraud

Indeed, information-based industries reported the highest incidence of theft of information and electronic data; including financial services (29%), technology, media and telecoms (29%), healthcare, pharmaceuticals and biotechnology (26%) and professional services (23%).

Roughly one in four companies were hit by physical theft of cash, assets and inventory or information theft, both down from 2010. Management conflict of interest (21%), vendor, supplier or procurement fraud (20%) and internal financial fraud (19%) all saw notable increases. The incidence of corruption and bribery nearly doubled over the past year from 10 to 19%.

Plansky said among some of the more surprising findings was that executives reported they felt unprepared to deal effectively with corruption. According to the survey, only 27% of respondents said they are well-prepared to comply with regulations, such as the Foreign Corrupt Practices Act and UK Bribery Act. Of those companies that are subject to one of these two laws, less than half, 43%, have trained senior management, agents, vendors and foreign employees to be compliant with one of these laws, and just 39% have assessed the risks arising from them. Only 37% of companies surveyed believe that their due diligence provides a sufficient understanding of a potential partner's or investment target's compliance with these acts.

"This is remarkable because the consequences of running afoul (of these laws) can be devastating," said Plansky. "These respondents are sophisticated business people. They understand these are issues and it's causing anxiety. I think as a result you care going to see increased attention to this."


Originally published on CSO |  Click here to read the original story.
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