Kroll Global Fraud Report
Kroll Global Fraud Report - Annual Edition 2010/2011 (Complete Report PDF)
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This year’s annual Global Fraud Survey, commissioned by Kroll and carried out by the Economist Intelligence Unit, polled more than 800 senior executives worldwide from a broad range of industries and functions in July and August 2010.
If fraud were a virus, almost everyone would be slightly ill
Of the respondents, 88% report that they had been hit by at least one type of fraud in the past year, a figure broadly similar in every region and consistent with those of previous years. Record-setting, headline-grabbing scams, such as the Madoff or Satyam frauds, can give a false impression of fraud’s financial impact on business. The most successful pathogens do not kill the host, but live off them. Of course, huge, company destroying losses do occur, but they are very rare. More typical are smaller losses over months or years.
In isolation, this appears to be good news. The frequent repetition of small losses, however, can create a significant problem in aggregate. In the past, this report has presented the figures for an average overall fraud loss, but such a figure is less instructive than it might seem: levels of loss are closely associated with the size of companies. Instead, it is more meaningful to report losses as a proportion of income. By this measure, the take of fraudsters from business rose by more than 20% in the last 12 months, from $1.4 million per billion dollars of sales to $1.7 million. Fraud, then, is only rarely an acute disease threatening the whole body. It is frequently, however, a widespread virus that, while usually draining limited resources from the host, is always ready to flare up when the opportunity arises. And like a virus, fraud is constantly mutating, and can, if left unchecked, become life-threatening. This year’s Global Fraud Survey digs deeper than previous years to offer an insight into the sources and impact of fraud and the perceptions of senior business executives around the world. The findings highlight several key trends:
