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Business fraud expected to rise

worldwide

HONG KONG: Many companies around the world, especially in Africa and Hong Kong, expect business fraud to rise, a survey said on Monday.

In a poll conducted by management consultancy KPMG Peat Marwick, more than half of the companies surveyed from around the world expected fraud to be an increasing problem for businesses.

Respondents from Africa appeared to be most pessimistic about the problem with 84 percent expecting an increase, followed by Hong Kong's 80 percent, KPMG said in a statement.

It added that companies worldwide realised fraud was already a serious problem.

"Over half of our respondents indicated that they were aware of at least one occurrence of fraud in their organisation in the past year," said Norman Inkster, president of KPMG Investigation and Security, based in Toronto, Canada.

"This awareness was highest in Africa, where 79 percent of respondents were aware of fraud in their organisations," he noted.

The most common frauds committed by staff were kickbacks, purchase of items for personal use, falsification of financial statements and misappropriation of cash.

Common frauds by external people included false representation, patent infringement, false invoices and secret payments such as bribes and commissions.

Inkster, former president of the international police organisation Interpol and former commissioner of the Royal Canadian Mounted Police, said in his experience, few companies around the world would be able to rely much on the police in dealing with fraud.

He added reasons for the expected increase in fraud seemed to differ by region. "In North America and in Africa, respondents to our survey seemeed to feel that the rise in white-collar crime would be due to worsening economic pressures.

In other parts of the world such as Hong Kong, the Middle East and Asia, Europe and Australasia, a weakening of society's values was the prime cause."

"A third reason given was the increasing sophistication of criminals -- not surprising in a world where these individuals are just as comfortable with cellular phones, international wire transfers and shell companies as they are with guns."

The poll drew responses from about 4,000 companies in 18 countries in North America, Europe, Australasia, Africa and Asia.-Reuter