Monday 11th November, 2013

According to the latest Global Fraud Report by Kroll, the number of organisations struck by fraud has risen by 9% over the last year. Much of the rise has been put down to a sharp rise in supply chain related issues. With the worldwide economy still struggling its way out of recession, and with less scrupulous companies and individuals attempting to think creatively around trying to "do more with less", it's a problem that's likely to continue to rise.

The problem is particularly rife in the area of procurement and supplier fraud which increased to just under 20% this year. Some of the issues seem to lie in a lack appropriate level of checks and balances within the layers of the supply chain system. To an extent, the report (which took findings from over 900 senior executives), attributed much of the fraud to corporate budget cutting. With less time to focus on reporting, organisations were simply looking at bottom line costs.

Falling within the same supply chain category - management conflict of interest also increased this year - with some organisations more or less openly doing business in a less than ethical way. In some cases, organisations are missing out on growth and investment opportunities, by mitigating against risk and not entering a marketplace which is, or is perceived to be, at significant risk from corruption and fraud.