Bosses more likely to rip off their firm, says KPMG
Monday 20 June 2011
Bosses are the biggest corporate crooks, according to a new report from KPMG. The accountancy group's research, published today, reveals that half of all UK corporate fraud is perpetrated by senior management or board members.
In addition, two-thirds of Brits who rip-off their own company are likely to have worked at the same firm for a decade or more. The research pinpoints the most likely member of staff to become a white-collar criminal: he is aged between 36 and 45 and works in accounts.
Richard Powell, forensics partner at KPMG, said: "What has remained unknown until now is the extent to which the temptation to commit fraud has infiltrated both the board and executive management in the UK.
"Often long-serving and senior employees will be better able to override controls and have accumulated a good deal of personal trust, so will be less suspected, and are most prone to committing embezzlement and procurement fraud."
The crooks are getting away with it as firms ignore red-flag warnings, such as an employee who rarely takes holidays or leads an excessive lifestyle relative to income. Bosses are the chief crooks as they are often in a position of the greatest opportunity and temptation.
They may be able to write corporate cheques to themselves or abuse their position to make excessive expense claims or gain financial advantage for themselves.
With bosses being the biggest fraudsters, it's not surprising that management reviews seldom uncover the corporate crimes, with only a fifth coming to light because of management efforts. The leading way that crimes are uncovered are whistleblower reports and anonymous tip-offs, which account for a third of detected UK frauds.
"The challenge is to peer through the ordinary disguise of the fraudster, close the gaps in the corporate armour, enhance fraud prevention and detection and respond more rapidly to red flags," Mr Powell said.
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