Could Your Business Be At Risk?

Service graphic_audit 4_RGBUHY Haines Norton’s Assurance and Advisory Manager Tadius Munapeyi explains why all New Zealand businesses are at risk of economic fraud.

Over 30% of New Zealand businesses of all sizes, structures and within all industries are believed to be subject to fraud, error and corruption – and this figure appears to be rising.

Why Is Fraudulent Behaviour So Prevalent?

For many New Zealanders, the increasing financial pressures created by family, lifestyle, rising costs of living and inflated housing prices can become overwhelming.   Add to that the juggle of managing increasing work loads in an already time-poor environment, and it is no surprise that businesses are more at risk from fraud and error than ever before.  And despite the fact that corrupt employees can and do cripple many small- to medium-sized businesses (SMEs), the punishment for convicted offenses is often a light sentence of community service.  Repeat offenders are common: in recent years, reported cases of employee dishonesty have included faked references, CVs and qualifications to hide a history of deceit.

Without adequate checks and processes, a company can experience ongoing fraudulent activity without even being aware of it.  Fraudsters often start on a small scale, for example purchasing personal items with a company credit card, using company equipment for personal use, or taking excess stock.  When the behaviour goes unchecked it can lead to an increased scale of dishonesty and result in significant losses or “leakage” for the company.