Kroll has released its latest Global Fraud Report, a sector-by-sector breakdown of the prevalence of fraud among a broad spectrum of the world’s companies. The report, which took into account the responses of 729 polled senior executives, determines that overall instances of fraud have risen only marginally in the recession, but that certain sectors—most especially financial services—have been hit badly.
The report determines that the average company suffered fraud-related losses of $8.8 million over the last three years, up a mere 7 percent from the $8.2 million reported last year. The companies surveyed were categorized into 10 industries: financial services; professional services; healthcare, pharmaceuticals, and biotechnology; technology, media, and telecommunications; natural resources; retail, wholesale, and distribution; consumer goods; travel, leisure, and transportation; and construction, engineering, and infrastructure. Of the companies surveyed, 46 percent had global annual revenues in excess of $1 billion.
The sectors currently most vulnerable to fraud are financial services, manufacturing, retail/wholesale/distribution, and construction/engineering/infrastructure, all identified as industries in which poor economic performance contributes to increased fraud. Financial services, in particular, has suffered of late, with an average company loss of $15.2 million over the last three years, up from $12.9 million last year, and almost twice the average loss across all sectors.
Those sectors that were doing the least to combat fraud were professional services, technology/media/telecommunications, and retail/wholesale/distribution.
The most pressing concerns, as recorded by survey respondents, were information theft (with 20.1 percent of respondents considering themselves highly vulnerable, corruption and bribery (13.9 percent), and theft of physical assets (13.5 percent).
Kroll, a subsidiary of Marsh & LcLennan Companies, publishes its Global Fraud Report annually. To read the full report, click here.