KPMG says the worst of NZ fraud is to come
(16 February 2010 – New Zealand) Fraudulent activity in New Zealand businesses soared in the second half of 2009, rising from NZ$22 million to NZ$76 million, according to KPMG’s six monthly fraud survey.
The country suffered a total of 61 fraudulent cases in 2009, while in 2008 there were a total of 63 cases for the year totalling NZ$70 million.
To be included in the survey a person must be charged or sentenced. Mark Leishman, KPMG forensics partner said that the jump in the figures in the second half of 2009 was due to several multimillion dollar cases.
Mr Leishman also added that the economic crisis resulted in businesses keeping a closer eye on their books, resulting in more frauds being detected.
The fraud cases detected in the last six months were generally not new, with some going on for years, the overall fraud from the recession is yet to come, Mr Leishman warned.
Financial hardship was a key motivator for fraudulent activity and the average large fraud value in New Zealand amounted to around NZ$2.3 million per case.
The country has also seen an increase in fraudulent loan applications as the GFC pushed consumers into misrepresenting information on loan documents.
Managers who have access to company information and can over-ride internal controls are more likely to commit fraud than lower level employees, the survey indicated.
Employees in senior level positions averaged around NZ$1 million whilst employees in lower level positions averaged around NZ$500,000.
Two thirds of large fraud was committed against the government, financial institutions and commercial businesses in the June to December period.
To be included in the survey a person must be charged or sentenced. Mark Leishman, KPMG forensics partner said that the jump in the figures in the second half of 2009 was due to several multimillion dollar cases.
Mr Leishman also added that the economic crisis resulted in businesses keeping a closer eye on their books, resulting in more frauds being detected.
The fraud cases detected in the last six months were generally not new, with some going on for years, the overall fraud from the recession is yet to come, Mr Leishman warned.
Financial hardship was a key motivator for fraudulent activity and the average large fraud value in New Zealand amounted to around NZ$2.3 million per case.
The country has also seen an increase in fraudulent loan applications as the GFC pushed consumers into misrepresenting information on loan documents.
Managers who have access to company information and can over-ride internal controls are more likely to commit fraud than lower level employees, the survey indicated.
Employees in senior level positions averaged around NZ$1 million whilst employees in lower level positions averaged around NZ$500,000.
Two thirds of large fraud was committed against the government, financial institutions and commercial businesses in the June to December period.
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