BACKGROUND INVESTIGATIONS

R&C: To what extent have you seen an increase in corporate fraud in recent years? What are some of the common themes and underlying causes?

Anjum: Fraud always seems to be increasing. No matter how sophisticated our attempts to prevent it become, perpetrators are always adapting with new methods. According to the 2018 Association of Certified Fraud Examiners (ACFE) Report to the Nations, asset misappropriation is the leading type of occupational fraud. It makes up 89 percent of fraud cases and causes a median loss of $114,000. This is followed by corruption – which includes conflicts of interest, bribery, illegal gratuities and economic extortion, primarily – at 38 percent and a higher median loss of $250,000. There are various factors at play here, but it starts with ‘tone at the top’. Basically, corporate culture often sets the tone for how strict, or lax, an organisation is when it comes to preventing or detecting fraud. Combine a lax approach with a country or jurisdiction where corruption is still prevalent, even considered ‘business as usual’, and there will likely be fraud.

Oct-Dec 2019 Issue

Corporate Research and Investigations Limited

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