This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.

Bookmark Email Print page

Deloitte report shows fraud is on the board agenda, but companies know they must do more

7 November 2012

Fraud remains at the forefront of board agendas with nearly half (43 per cent) of organisations indicating that their vulnerability to fraud risk has increased in the last 12 months, according to a new report from Deloitte, the business advisory firm.   

The report reveals that 98 per cent of organisations encourage a strong approach to fraud risk, with 79 per cent having a documented fraud policy - yet 40 per cent of organisations are still not performing regular fraud risk assessments, the quickest and most cost-effective way to identify weaknesses and stop fraud.

The report, Internal Audit Fraud Challenge: prevention, protection, detection, looks at how continued economic uncertainty and changes to the regulatory environment have influenced organisations’ focus on fraud risk and what impact this is having on the role of internal audit.  Key findings included:

  • 76 per cent or organisations surveyed believe economic uncertainty is generating board level discussion around enhancing fraud risk monitoring;
  • 64 per cent believe economic uncertainty has extended the level of internal audit remit around fraud risk;
  • 58 per cent believe changes in regulation and legislation are leading to an increased focus on fraud risk management.

Michael Jones, partner in Deloitte’s Audit Advisory practice, said: “Our survey results indicate that there is healthy debate around fraud risk.  However, there is 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.”

Many companies highlighted the need for increasingly sophisticated methods of fraud prevention, with nearly half (47 per cent) saying that data analytics would help them most.  Of the companies not currently using data analytics regularly (40 per cent), over a quarter (28 per cent) plan to implement a data mining programme in the next 12 months.

Jarrod Haggerty, a partner in Deloitte’s Forensic Technology practice, said: “There is clearly work to be done by some organisations before they fully exploit the benefits of being able to manage and analyse large volumes of data in an efficient and meaningful manner.  This sort of data analysis can be effective in not only identifying anomalies, but it also helps create a more proactive fraud prevention environment.”

Ends

Notes to editors:
About the survey:

  • Nearly three quarters of our respondents (73%) work for an organisation with an annual turnover of more than £500m;
  • 47% work for an organisation listed on a stock exchange and 36% work for a government/public sector organisation.

About Deloitte
In this press release, references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

 

Media contacts

Name:
Ben Jun-Tai
Company:
Deloitte LLP
Job Title:
Phone:
020 7303 6989
Email
bjuntai@deloitte.co.uk

Share this page

Email this Send to LinkedIn Send to Facebook Tweet this More sharing options
Follow:

Get in touch

More on Deloitte