Kroll Global Fraud Report examines impact of fraud on 10 business

26 September 2007

Corporate fraud cannot be dismissed as a rare ailment affecting a handful of badly run or unlucky companies: it is a global challenge to every modern business.

The Kroll Global Fraud Report (See: Four out of five companies worldwide affected by fraud: Kroll Global Fraud Report) provides a deeper understanding of the extent and nature of fraud today, and of the strategies to fight it. It draws on decades of expertise of Kroll professionals worldwide and on a survey of nearly 900 senior executives, commissioned from The Economist Intelligence Unit, investigating how this issue affects their companies.

The survey results show a widespread, expanding problem: four out of five businesses have suffered from corporate fraud in the last three years; One in 10 large companies lose over $100 million a year to it; about half of firms consider themselves at least moderately vulnerable to seven different categories of fraud and 8 in 10 believe that their overall vulnerability has grown.

The very tools and techniques used in pursuit of global opportunities — complex IT arrangements, entry into new markets, and increased collaboration — are themselves increasing risk levels.

As Jules Kroll makes clear, market turmoil inevitably uncovers cases of fraud, and the survey suggests that many are out there to be found. There is no single, simple solution. Although present everywhere, the face of fraud, and the best countermeasures, vary by region, even by country, with legal systems, degrees of economic development, technology levels, cultural norms, and history each profoundly shaping local conditions.

In a globalised world, however, criminals can use local laxity to defraud businesses operating continents away. The survey suggests that companies treat fraud mostly as a financial and IT issue. Both are important, but the problem is far wider.