Employee theft and fraud is on the increase –
and an Australian start-up company believes it has pioneered a means of early detection.
According to a recent survey conducted by KPMG, the total funds lifted from organizations came to $345 million – a significant increase from the $301 million of 2008, totaling 174,914 cases. “Employee fraud is a growing concern for organizations in all business sectors both in monetary and reputational terms,” says Alon Spitzer, who has founded Integrity Elements, a company specializing in the new field of ‘ integrity testing and valuation’.”
“The vast majority of staff in any organization are trustworthy and honest. However, businesses are now beginning to realise and understand the scale of the threat posed by the small proportion of staff that act dishonestly and defraud their employer.”
According to the ACFE 2010 report on occupational fraud the median length of the schemes was 18 months from the time the fraud began until the time it was detected. The median loss caused by the occupational frauds in the report was $160,000. Nearly one-quarter of the cases caused at least $1 million in losses and nine cases caused losses of $1 billion or more.
Historically, the most serious threat from staff fraud has been centered on relatively senior employees in management positions. However, the major threat has now shifted down the organizational hierarchy to more junior members of staff, who have access to, and responsibility for, more confidential customer and payroll data than ever before,”
“With as much as 30 per cent of all business failures attributable to employee theft, employers are interested in any device or technique that could detect or prevent employee theft.”Given the present wave of corporate scandals and failures, it is not surprising that organisations are being expected to create strong ethical cultures and select employees who will fit into those cultures. This explains, to some extent, the growing emphasis on integrity testing in the business world. Spitzer has simple advice for businesses who are concerned they may be at risk