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:
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.”
Notes to editors:
About the survey:
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