Case Study Kpmg Report
With the development of technology, the operation of business has become increasingly complex. This has created the opportunity for people to commit fraud for their personal gain. The consequence of fraud Issue can Impede corporations achieving their business objective and Incur huge loss. This paper is going to base on the case study by KEMP which Is regarding about the fraud, corruption, and bribery Issue In business In New Zealand and Australia.
This report will firstly focus on discussing the main findings in this case study.
Then it will evaluate the survey from tooth positive and negative sides. Finally, it will analyses how Australian corporation respond to this survey. To begin with, there are three key findings of this survey. Firstly, this survey has summarizes the main fraud fact in 2012. Compared to fraud fact in 1997, which is $105 million, the total loss result from fraud in 2012 has increased to $373 million, which is more than double amount of the figure in 1997.
It also found that $322. 5 million loss was on the financial sector. In addition, it found most fraud occurred In the corporation which has over 1000 employees.
Secondly it as analyses the trend of fraud based on different criteria. Based on the Inside and outside factor, It has found over 75% of reported fraud occurred in the Inside employees. Moreover It has found most of those employees are non-management staff.
However, It has reminded that users need not only focus on the mall trend but also pay attention to the increase of fraud loss by senior management as it caused huge loss for organizations. Based on the gender diversity factor, the fraudsters are more likely to be male as the survey has found male had 3 times more likely to commit fraud.
According to the demography factor, it indicated that main people who commit fraud lies in the group who is between 29 and 49 years old. Moreover, this survey has suggested that people over 55 years old and with household debts are recently involved in the major fraud. From the motivation of fraud it suggests the main motivation of committing fraud is personal financial pressure and greening lifestyle.
Finally, It has found that the development of social media has created opportunity to commit collusive fraud between staff and third parties. The difficulty of collusive fraud has lied on the time to detect the fraud which needs 665 days.
In addition, this survey has both positive side and negative side. To begin with, this survey has provided business users better understanding of fraud issue in Australia. This is because this survey has critically analyses the consequence of fraud issues and it has indicated the characteristic of people who are more likely to commit fraud.
In addition, this survey can provide valuable perspective of fraud for business in Australia and New Zealand. This survey has indicated the circumstance which the fraud would happen. For example, non-management staff are more likely to be involved in the major fraud.
Moreover it provides the recommendations for corporations on how to detect fraud, prevent fraud and respond to fraud. More specifically, this survey has suggested corporations not only need to pay attention to internal control structure but to focus on the fraud Issue which Is between Internal staff and external parties. This survey has recommended that corporation should enforce the awareness of reporting fraud.
It has suggested that strong internal control Ana awareness training together Walt notational Day employee Ana external parties would be the effective control for fraud issues However, this survey also has TTS limitation.
To begin with, the 281 respondents may not behalf all organizations in Australian and New Zealand. There might be more issues about fraud happened in the business which is not selected to respond to the survey. Secondly, the response of the survey may not be the true and fair view or might be subjective. Finally, the survey may have limited use for Australian business which operates overseas.
Finally, Australian corporation should treat this survey as guideline to establish the effective internal investigation unit which engages in detecting any fraud issue in business.
In edition, Australian corporations should enforce the awareness of employees about fraud issue. Moreover, Australian corporations can pay attention to employees who have heavy financial pressure when performed the employee screening. Apart from these, Australian corporations should not only enforce the business internal audit function but also focus on the relationship between internal staff and external parties for example, bank, suppliers. Based on this survey, Australian corporations should build effective monitor unit for fraud prevention, as indicated by this survey the best strategy for fraud in business is the prevention strategy.