Revealed; which of your employees is most likely to commit fraud

The average Australian fraudster is a 38 year-old-male, has been employed by the victim organisation for six years and takes cash to an average value of $262,000, according to a new survey.

Accounting firm KPMG has used its eight annual fraud survey of 420 organisations research to build a detailed picture of the average fraud perpetrator.

They usually work alone, have held a non-management role for about four years and, in almost half of cases, have been motivated by gambling problems. The perpetrator is usually caught 11 months after commencing his fraudulent activities.

But the survey also says that in a sign business recruiters must improve recruiting practices, 15% of fraudsters have a history of dishonest behaviour not reported to the company. Only 3% of cases involved an employee with a past of dishonesty known to the employer.

The total value of fraud reported between 2006 and 2008 was $301.1 million. About 15% of incidents involved identity fraud, with the most common form the use of an unauthorised credit card, or stolen credit card numbers. A total of $90 million was lost in this way in 154,602 cases.

Head of KPMG Forensic Australian practice, Gary Gill, said businesses must think carefully about what fraud prevention measures are put in place. The survey found early signs of fraud were ignored in 22% of major fraud incidents.

“Defrauded organisations most likely did little to prevent the fraud occurring, and in fact probably missed a number of warning signs before eventually uncovering the fraud,” he says.

“An effective, business-driven approach to fraud risk management combines prevention, detection and response.”

KPMG says an anonymous reporting system is one of the most cost effective fraud detection strategies and one that can be employed by organisations of all sizes.

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