Vulnerability to fraud has increased in business

Thursday 8 November 2012

Business

Almost half of all organisations believe their vulnerability to fraud risk has increased in the last 12 months, it has been reported.

Research conducted by Deloitte found that fraud remains at the forefront of board agendas, with 43 per cent reporting increased vulnerability.

Some 98 per cent of organisations said they encourage a strong approach to fraud risk, with 79 per cent having a documented fraud policy.

However, 40 per cent are still not performing regular fraud risk assessments, which may be hampering their efforts to identify weaknesses.

Michael Jones, partner in Deloitte’s Enterprise Risk Services practice, said there is still work to be done by companies to ensure fraud is kept to a minimum.

"While continued economic uncertainty has given greater attention to the risk of fraud within organisations, the fact that many organisations are still not performing regular fraud risk assessments is an area of weakness," he stated.

"Failure to undertake fraud risk assessments on a regular basis will make it difficult for internal audit functions to determine how to effectively focus key and sometimes limited resources on the areas of highest risk."

Jarrod Haggerty, a partner in Deloitte's Forensic Technology practice, said there is "clearly work to be done" by some organisations.

They need to change their approach in order to successfully manage and analyse large volumes of data in an efficient and meaningful manner, he stated.

"This sort of data analysis can be effective in not only identifying anomalies, but it also helps create a more proactive fraud prevention environment," Mr Haggerty stated.

Posted by Dan Smith