23 February, 2010

Fraud cases have doubled in the last six months, according to new figures from KPMG. The research reveals the total value of fraud cases during the 2009 calendar year reached $317 million, up from $221 million in 2008. The average case involved $2.6 million.

New South Wales accounted for 26 cases totalling $110 million, while Western Australian recorded twice as many fraud cases during the six months ending December 31.

Gary Gill, KPMG national head of forensic, says there was an increase in fraud during the crisis due to companies doing it tough. However, he also points out that companies were paying more attention to their bottom lines during this time and thus more fraud cases were reported.

According to KPMG the vast majority of fraud cases are being perpetrated by people within the company, where businesses aren't putting enough regulations in place. The global financial crisis provided employees with more incentive to steal however, KPMG does not expect the number of cases of fraud to drop as the economy recovers.

"I think some key areas have been identified due to this study. It shows fraud is being committed by people inside organisations, and both by management and non-management employees. The management tends to involve fraud cases with higher value, but non-management tend to be responsible for higher numbers of cases," said Mr Gill.

"Another point is that about half the frauds we investigate are on the issue of purchasing fraud. In a business with fewer people there is generally less segregation of duties, one person does everything and there is more risk."

KPMG suggests that small business owners need to keep a close eye on their bank balance and they need to ensure employees have responsibilities that can be tracked. Keep an eye on everything.