Businesses vulnerable to fraud: survey
By AAP - theage.com.au
May 27, 2008

Less than half of Australia's privately-held businesses take precautions against fraud - an activity that costs firms billions of US dollars each year worldwide, a new survey has found.

Research by consultant Grant Thornton International found that just 40 per cent of such businesses have specialist staff in place to detect and prevent fraud.

Australia sits below the global average of 45 per cent and well below the Philippines, which has the highest percentage of businesses employing specialists to detect fraud at 72 per cent.

Fraud is generally considered to involve theft of assets - such as commercially sensitive information and intellectual property - or false accounting.

"It is important for privately-held businesses to take steps to protect themselves against fraud, particularly as fraud costs businesses billions of US dollars each year across the globe," said Tony Markwell, national head of privately-held business at Grant Thornton Australia.

"Whether specialists are employed or not, processes should be in place to ensure that potentially fraudulent activity is caught in the early stages."

The survey of 7,800 business owners across 34 countries found that of those businesses that employ people to detect and prevent fraud, the number of people involved in anti-fraud activity has increased by 12 per cent globally in the past 12 months.

Domestically, South Australia and Western Australia lead the states, both with 40 per cent of businesses employing fraud specialists.

However, 64 per cent of businesses in Queensland and 59 per cent of businesses in NSW have decreased the number of people they employ to prevent fraud in the past 12 months.

"It is concerning to see that so few businesses take fraud seriously," Mr Markwell said.

"Owners and managers should develop an anti-fraud culture and introduce appropriate policies, controls and procedures to prevent it from happening in their business.

"It is also important to have an up to date insurance policy that is consistent with current business risks."