Management Accountants On The Alert For Insider Fraud

According to the recent 2012/2013 Kroll Advisory Solutions’ Global Fraud Report over two-thirds of corporate frauds are committed by insiders, up for the second year in a row from 60 percent last year and 55 percent in 2010.

Although it has declined slightly, information theft remains one of the most widespread frauds facing companies. The fact that it has only declined slightly, down from 23 percent of companies being affected this year compared with 21 percent in the last survey, it shows that it is more resilient than some other frauds, which saw much greater declines.

Where there has been a loss, 35 percent of the time the issue is employee malfeasance, which is more than twice the rate at which external hackers are to blame.

However, interestingly, fraud concerns have abated. In particular, the number of respondents saying that they were moderately or highly vulnerable to information theft has fallen from 50 percent to 30 percent, even though only two percent fewer companies reported being hit by this fraud.

These findings suggest that many companies have safeguards in place, such as a robust management accounting system that can detect the risks to the firm and nip problems in the bud. It is certainly true that companies that lose the most to fraud are those that are less likely to have fraud controls in place.

According to the Chartered Institute of Management Accountants (CIMA), management accountants, whose professional training includes the analysis of information and systems, can have a significant role to play in the development and implementation of anti-fraud measures within their organisations.

A management accountant who is trained in fraud auditing can help in the disclosure of fraud and the internal controls necessary to deter it, making him or her a vital part of the fight against insider fraud.

Posted in Blog, Business Technology.