We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Fraud strikes four out of five companies worldwide
Forward Thinking

Fraud strikes four out of five companies worldwide

December 12, 2007
Supply Chain Quarterly Staff
No Comments

If you think your company has no reason to worry about fraud and corruption, think again. A recent survey conducted for the risk consulting company Kroll found that four out of five companies have experienced some sort of fraud in the past three years. In every industry sector, companies have lost many millions of dollars to fraud, according to Kroll's latest Global Fraud Report. The report draws on results of a survey by the Economist Intelligence Unit of 900 senior executives worldwide.

Our interconnected world has left more companies than ever vulnerable to all types of fraud. "As our society has become more reliant on information technology, increased globalization, and greater interconnectedness, certain exposures have expanded right along with them," said company founder Jules Kroll when the report was released. "Dramatically new exposures such as [identification] theft, various [information technology] crimes, and false reporting by asset managers were rarely seen 25 years ago."

One-fifth of all companies have been victims of information theft, selfdealing, financial mismanagement, internal financial fraud, procurement fraud, or corruption and bribery. Those problems have a huge impact on the bottom line: The average cost of such losses to large companies—defined as those enterprises with annual revenues of more than $5 billion—was more than $20 million. Moreover, one in 10 large companies reported fraud losses exceeding $100 million. More than one-fifth of all companies in sectors such as healthcare, pharmaceuticals, and biotechnology had lost more than $1 million.

The retail, wholesale, and distribution industries have not escaped this troubling trend. About 20 percent of respondents in that sector said they considered their companies to be highly vulnerable to physical theft and procurement fraud.

In one respect, those industries are comparatively welloff; they suffered only 29 percent of the average loss for all companies surveyed. Look at it from another angle, though, and they appear to be less successful in preventing losses: 31 percent of respondents in that sector have experienced procurement fraud. And 44 percent said they have been victims of physical theft; that's considerably higher than the 34 percent of all companies that reported thefts of physical assets.

For all companies surveyed, high staff turnover—cited by 32 percent of respondents—was the most frequent cause of exposure to fraud. Close behind were information technology complexity (31 percent), entry into new markets (28 percent), and increased collaboration between unrelated companies (26 percent).

Finally, the study found that the extent of corruption and bribery varies widely from one region of the world to another. Thirty-nine percent of those surveyed had encountered bribery and corruption in their business dealings in the Middle East and Africa. Twenty-nine percent reported such problems in Eastern Europe while only 14 percent said these issues occurred in Western Europe.

[Source: Kroll Global Fraud Report, www.kroll.com/fraud]

  • Related Articles

    Five ways consumer packaged goods companies can respond to seismic changes in the supply chain

    Report: Trucks remain prime target of cargo thieves worldwide

    “State of Logistics Report” shows out-of-sync supply chains battling sharply rising costs

Recent Articles by Supply Chain Quarterly Staff

Cargo imports forecast to sink near three-year low in February

Air cargo demand slumped in 2022 after “extraordinary” levels in 2021

Intermodal sector weathered a “challenging” year in 2022, IANA says

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Forecasts call for freight rate slumps in 2023

  • Projected U.S. recession in early 2023 will soften freight market

  • Inflation drops again as interest rate hikes hit home, NRF says

  • How to avoid the next crisis: A new approach to supply chain agility

  • New Jersey truck fleet says Freightliner tractors will deliver safety as well as freight

Featured Video

20221107korber large vs

Enhancing Customer Experience with Your Supply Chain Strategy

Viewer Contributed
With the rise of e-commerce, many businesses have had to transform their warehouses to handle online orders in addition to regularly scheduled inventory shipments. This means warehouses need more information than ever before to ensure they can meet customers' needs. As a result, companies need to select warehouse...

FEATURED WHITE PAPERS

  • Guide to Pallet Rack Safety

  • 3PLs: Complete Orders Faster with Flexible Automation

  • A shipper's guide to navigating post-pandemic holiday freight

  • THE NEW WAY TO WAREHOUSE: 4 Innovations in Automation & Robotics to Boost Warehouse Productivity

View More

Subscribe to Supply Chain Quarterly

Get Your Subscription
  • SUBSCRIBE
  • E-NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing