Half of the finance directors interviewed believed fraud may still be taking place at their company, and security matters are at the top of the agenda at many board meetings.
The survey of 100 finance directors picked from across the UK's top 1,000 companies was carried out by Mori for Security Gazette and international consultants Control Risks.
The report proves that recent high-profile cases of fraud are the tip of the iceberg. About 60 per cent of fraud cases are carried out by a company's own management, with middle management the most common culprits. Greed and revenge were the main motives.
A total of 68 per cent of those who had taken part in the survey said their company had experienced fraud, while 51 per cent of those who have experienced fraud thought it might still be taking place in the company.
Nigel Blackman, editor of Security Gazette, said: "In the past decade most organisations have made efforts to improve their physical security, but our report indicates that not enough has been done to prevent fraud."
The report highlighted that while the threat of fraud is a key item on board meeting agendas, more often than not corrupt practices are being perpetrated by those best able to prevent them: directors and managers.
Mr Blackman said: "Despite a number of high-profile cases in recent years, the myth about management persists. Senior staff have all sorts of privileges and opportunities but that does not mean they are honest."
Britannia Airways, Shell UK and several banks and building societies are among scores of companies that have been hit by fraud recently.
Paradoxically, the report also shows that 86 per cent of those surveyed think that their company's fraud control mechanisms are effective.
This is despite 45 per cent of finance directors thinking that fraud is likely to take place in their firm in the future.
"The inherent contradiction in these results clearly demonstrates a 'not in my backyard' feeling," said John Conyngham, head of Control Risks' Corporate Resolutions division.
"There is a clear indication that companies, while willing to acknowledge the scale of the problem, are reluctant to face up to the lack of safeguards in their own organisations."
That attitude, the report says, is similar to the thinking that inspired the Cadbury Report which made clear that directors, and particularly non- executive directors, have to be responsible for corporate governance and probity.
"The fact that management is responsible for 60 per cent of fraud is not a surprise," Mr Conyngham said. "In most cases they have the opportunity and the means to deceive deliberately."
He said that findings in the report should not necessarily be a surprise. "Any manager with significant responsibility over suppliers and contractors could be susceptible.
"Extravagant lifestyles, holidays, cars - without obvious means to support them - are often a key signal that fraud is taking place."
That is borne out in the report which shows a third of all frauds involved individuals from outside the company. It also reveals that 30 per cent of frauds take place in finance departments.Reuse content