Fraud at forefront of board agenda, says Deloitte
New report by advisory firm says companies know they must do more
By Gaurav Sharma | CFO UK | Published 13:45, 07 November 12
Fraud remains at the forefront of board agendas according to a new report published on Wednesday by business advisory firm Deloitte.
Researchers for its report titled Internal Audit Fraud Challenge: prevention, protection, detection found that nearly half (43 per cent) of organisations polled indicated that their vulnerability to fraud risk had increased in the last 12 months.
The report further revealed that 98 percent of organisations encourage a strong approach to fraud risk, with 79 percent having a documented fraud policy. However, Deloitte also found that 40 percent of organisations were still not performing regular fraud risk assessments – the quickest and most cost-effective way to identify weaknesses and stop fraud.
In other key findings, Deloitte noted that 76 percent or organisations surveyed believed that economic uncertainty was generating board level discussions around enhancing fraud risk monitoring.
Another 64 percent of respondents believed economic uncertainty has extended the level of internal audit remit around fraud risk and 58 percent believed changes in regulation and legislation were leading to an increased focus on fraud risk management.
Of the survey respondents, 73 percent worked for an organisation with an annual turnover of over £500 million. Additionally, 47 percent worked for an organisation listed on a stock exchange while 36 percent work for a public sector undertaking or government department.
Nic Carrington, partner in Deloitte’s Forensic Services team, felt the results pointed to a healthy debate around fraud risk but that there was still work to be done by companies to ensure fraud is kept to a minimum.
“While continued economic uncertainty has given greater attention to the risk of fraud within organisations, the fact that many organisations are still not performing regular fraud risk assessments is an area of weakness. Failure to undertake fraud risk assessments on a regular basis will make it difficult for internal audit functions to determine how to effectively focus key and sometimes limited resources on the areas of highest risk,” he added.
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