Financial experts in Dubai today warned UAE companies not to hire “crooks” if they want to avoid falling victim to fraud.
According to data from Dubai World, more than 15 percent of executive
résumés are falsified, while internal fraud on average slashes company revenues by around 5 percent.
“It is essential; it is paramount, that you hire the right person,” said Abdulqader Obaid Ali, chief of internal auditing at Dubai World.
“If you hire a crook you are going to be faced with fraud. Make sure you streamline your hiring processes. Especially when you’re hiring not from the UAE, but from outside. Some 15 percent of executive CVs are falsified.”
Firms also need to carry out adequate reference checks and personal assessments if they want to reduce corruption from within their organisation, Ali said.
Other panelists added that many firms were unknowingly hiring workers without assessing them for illegal activity previously.
“There is a background check done on individuals coming into the country,” said Tania Fabiani, who heads up the Middle East Fraud Risk Assurance Services at PricewaterhouseCoopers (PwC).
“[But some companies] fail to realise that the background check is actually done from a political and religious perspective rather than criminal background, so does this person have a bankruptcy or drug history or have they committed a misdemeanour in the country that they came from?
“I really think for discipline to exist... you need a culture of corruption prevention.”
Recent figures from the UAE’s State Audit Institution (SAI) said authorities are currently seeking to recover more than AED1bn (US$272.4m) lost due to misappropriation of public funds, forgery, fraud and bribery.
In a statement released by official UAE news agency WAM, the SAI said it had referred more than 10 cases of corruption to the Public Prosecution department in the last two years.
According to PwC's Middle East Economic Crime Survey, more than a quarter of businesses and organisations in the region have also reported economic crime in the last 12 months, with main crimes being asset misappropriation, bribery and corruption, cybercrime and accounting fraud.
Thirty-nine percent of respondents said they would likely to face bribery and corruption in the next 12 months, a rate which is much higher than the global average of 23 percent.
The survey also revealed that fraud detection mechanisms in the Middle East were not as robust as other regions, and two in five respondents reported that their organisations have not performed a fraud risk assessment in the last 12 months.
Some 69 percent of those surveyed said the most serious fraud incidents were committed by internal perpetrators, typically male, between 31 and 40 years old, a graduate degree holder and someone who had been with the company for three to five years.
Almost half of those surveyed reported that incidents of fraud had cost their organisations between US$100,001 and US$5m in the last year.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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