Four out of five companies worldwide have been victims of fraud in the past three years. The average cost to large companies was more than $20 million, with about one in 10 losing more than $100 million, according to the latest Global Fraud Report from Kroll, the New York-based risk consulting company. The report draws on a survey by the Economist Intelligence Unit of 900 senior executives worldwide.
The retail, wholesale, and distribution industries have not escaped this troubling trend. About 44 percent of respondents in that sector reported experiencing theft of physical assets in the last three years. (That's considerably higher than the 34 percent of all companies that reported theft of physical assets.) Other causes of loss in this sector include procurement fraud, which was reported by just under one-third (31 percent) of respondents, and information theft, corruption, and financial mismanagement, reported by approximately a quarter of the respondents. Still, compared to the survey respondents at large, those industries are comparatively well off, suffering only 29 percent of the average financial loss for all companies surveyed.
Survey results for the full respondent base showed that high staff turnover, cited by 32 percent of respondents, was the most common cause of increased exposure to fraud. Close behind were complex IT arrangements (31 percent), entry into new markets (28 percent), and increased collaboration between unrelated companies (26 percent).
To view a copy of the report, go to www.kroll.com/fraud.