Most fraud is an inside job, says survey

November 10, 2011 from InfoWorld – “Fraud cost organizations 2.1 percent of earnings in the past 12 months, which is equivalent to a week of revenues over the course of a year, according to the Kroll Annual Global Fraud Report, a recent survey that polled more than 1,200 senior executives worldwide.

The research does contain some good news, however, and found a decline in the frequency of fraud over last year. Of the executives polled, 75 percent suffered some kind of fraud-related loss in the last 12 months, which is down from 88 percent the year prior.

However, fraud remains predominantly an inside job, according to the report, and insider jobs increased this year. The 2011 figures show that 60 percent of frauds are committed by insiders, up from 55 percent last year…”

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180 View – The article discusses fraud related to the data that has now become more easily accessible as well as the traditional methods such as procurement fraud or internal financial fraud. Although access to information is much better than before, fraudulent employees could have taken hard copy reports in the past and shared them with competitors. With good access restrictions built into the system which are enforced using third party reporting tools, we think fraud opportunities should be diminished. As far as the more traditional forms of fraud, there are tools that can help reduce these risks. These tools include comprehensive audit trails, workflow which enforces division of duties and access restrictions.