printer friendly version

85% of 'worst frauds' committed by employees

A shocking 85% of the worst frauds in business worldwide were committed by employees, an increase of over 3% on the previous year, says Mariaan van Kaam, executive director of VoiceIT South Africa, and an associate of corporate security management company GriffithsReid.

"The latest international fraud survey conducted by Ernst & Young also showed that more than 50% of the fraudsters were in management positions," Van Kaam says.

The survey also revealed that 85% of managers committing the largest frauds had less than one-year's service. "These figures have been generated from international studies, but tie in very closely with our own experience in South Africa," says Van Kaam.

Part of the growing problem can be blamed on the growing complexity of organisations, poor corporate governance, sloppy accounting practices, and a recessionary environment, but this is not the whole story," she says.

Issues such as corporate culture, staff motivation and loyalty, and top executives' levels of accountability and thus willingness to address this problem in a serious and dedicated manner, all play a role in determining the levels of intra-organisational criminality.

The good news is that these issues can be addressed by adopting programmes designed to bring about employee mindset and behaviour changes at all levels. "At the foundation of such a programme lies the need to boost staff morale, security awareness and motivation, and to develop, build and entrench a sound integrity standard," says van Kaam.

"With detection rates of internal crime still standing at around a mere 20%, the bulk of the cost of intra-organisational criminality is borne by the company, and ultimately by the consumer," she says.

The true cost of fraud goes beyond the financial loss and has implications for the company's reputation, morale, and governance credibility, as well as trust levels within an organisation.

For more information contact Mariaan van Kaam, VoiceIT, 011 954 1067.

Share this article:

Further reading: