Global profiles of the fraudster also reveals majority of fraud continues to be due to weak internal controls.
According to a new report by KPMG International, technology was found to be a significant enabler for a quarter (24 percent) of the 750 fraudsters investigated by forensic specialists across 78 countries. By contrast, the Global profiles of the fraudster report reveals that proactive analytics plays an astonishingly minor role in combating fraud, with only 3 percent of the fraudsters being detected in this manner.
“The double-edged sword of technology in fraud is only going to get sharper,” said Stephen Bell, KPMG New Zealand's Head of Forensic and Dispute Advisory Services. “As technology develops, so too do the techniques for fraudsters to use it maliciously. We are seeing limited evidence that organisations are proactively employing technology to prevent it. Threat-monitoring systems and data analytics are becoming essential tools for organisations to identify anomalous or suspicious behavior."
KPMG’s survey reinforces a number of findings in the 2016 Association of Certified Fraud Examiners (ACFE) Report to the Nations on Occupational Fraud and Abuse. In this global study a lack of internal controls was noted as the most prominent weakness contributing to the fraud. The ACFE study also noted the correlation between economic loss increasing with collusive frauds and the most effective detection method being through ‘Tips’.
To view additional information about the study, please click here.
Data was gathered from fraud investigations conducted by KPMG member firms’ forensic specialists in Europe, Middle East and Africa (EMA), the Americas, and Asia-Pacific between March 2013 and August 2015. KPMG analyzed a total of 750 fraudsters who were involved in acts committed in 78 countries. The survey examined “white collar” crime investigations conducted across the regions where the perpetrator was known and detailed contextual information on the crime available. It incorporates the observations and views of KPMG Investigations leaders in 81 countries across the world. The report builds on a similar study conducted in 2013.
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The views and opinions expressed herein are the personal opinions of the interviewees and authors based on their personal experience working as Auditors in the industry and do not necessarily represent the views or opinions of KPMG International or any KPMG member firm.