KPMG Fraud Survey 2009


KPMG Forensic has released their Fraud Survey 2009pdf-icon.

The survey shows that many managers remain concerned about fraud. There are plenty of investigations of fraud that may have helped fuel the financial markets meltdown. Record levels of government spending may usher in record levels of fraud, waste, and abuse. In these difficult economic times, managers may face pressure to do whatever it takes to “make the numbers.” For those companies operating outside the United States, increased investigation and prosecution of anti-bribery and corruption laws mean foreign operations have increased penalties associated with their risks.

Here are some of the key findings:

Nearly 1/3 of executives expect some form of fraud or misconduct to rise in their organizations.

The majority of executives cite fraud and misconduct as posing significant risks to their industry today.  If such wrongdoing were to be experienced, the greatest concern for over two-thirds of executives is the potential for a loss of public trust when market confidence is at a premium.

Executives expect the threat of fraud to remain steady or rise in the coming year. About three out of four executives believed that fraud and misconduct risks, such as misappropriation of assets and fraudulent financial reporting, will either stay the same or increase over the next 12 months.

Inadequate internal controls or compliance programs heighten the risks of fraud and misconduct. Twothirds of executives reported that inadequate internal controls or compliance programs at their organizations enable fraud and misconduct to go unchecked.

Roughly a quarter of respondents lack effective protocols on how investigations should be conducted and at what point the board of directors should be alerted to potential concerns.

Those areas where respondents cited the most amount of improvement needed include employee communication and training, technology-driven continuous auditing and monitoring techniques, and fraud and misconduct risk assessment.