Fraud largely due to ‘weak internal controls’ says KPMG

Report shows technology is number one fraud enabler
Fraud largely due to ‘weak internal controls’ says KPMG
By Staff writer
Wed 15 Jun 2016 08:22 AM

Fraud is mainly caused by weak internal controls, according to a report by financial consultants KPMG International.

Technology proved to be a major enabler for 24 percent of 750 fraudsters investigated by authorities across 78 countries as opposed to proactive analytics, which accounted for just three percent of the latter, revealed the report titled ‘Global Profiles of a Fraudster’, according to GDN Online.

KPMG said companies were not doing enough to prevent either.

“The double-edged sword of technology in fraud is only going to get sharper,” said KPMG International global head of investigations Phil Ostwalt. “As technology becomes more advanced, so too do the schemes to use it maliciously.

“And while it is clear that fraudsters are all too comfortable making use of technology to perpetrate a fraud, we are seeing little evidence that companies are doing the same to prevent it. Threat-monitoring systems and data analytics are must-haves for organisations on the look-out for anomalous or suspicious behaviour.”

KPMG experts in Bahrain said companies were taking steps against scammers.

“With technological disruption, these risks have compounded. However, organisations are increasingly becoming aware of the threats they face, and they are working pro-actively to prevent any fraud related incidents,” said KPMG in Bahrain partner and head of risk consulting Jeyapriya Partiban.

The report showed 24 percent of swindlers commit fraud by fabricating information in financial documents. Of those, 20 percent do so through email or other communication platforms while 13 percent use their permitted admissions to computer systems.

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