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Technology Rarely Leveraged To Spot Fraud, While Perpetrators Advance Tech-Enabled Schemes: KPMG StudyNEW YORK, May 24, 2016 /PRNewswire/ -- Technology is an important tool to help companies fight fraud, but many are not succeeding in using data analytics as a primary tool for fraud detection. Meanwhile, fraudsters are leveraging technology to perpetrate fraud, according to a new report by KPMG International, Global Profiles of the Fraudster. To read Global Profiles of the Fraudster, go to: https://assets.kpmg.com/content/dam/kpmg/pdf/2016/05/profiles-of-the-fraudster.pdf Technology significantly enabled 29 percent of the 110 fraudsters analyzed by KPMG in North America and 24 percent of the 750 fraudsters analyzed worldwide. However, proactive data analytics was not the primary means of detection in any North American frauds, and organizations only used data analytics to detect 3 percent of fraudsters worldwide. In descending order, North American frauds were most often detected by tip offs and complaints, management review, accidentally, suspicious superiors and internal audit. "Companies can use advanced data analytics technology to search for suspicious and unusual business activity amid millions of daily transactions," said Phillip Ostwalt, partner and Global Investigations Network Leader at KPMG LLP. "However, many are not capitalizing on such technology while fraudsters find new ways to gain access to confidential information, manipulate accounting records and camouflage misappropriations." In instances where fraudsters used technology to perpetrate frauds in North Amerca, 35 percent included creation of false or misleading information in accounting records; 29 percent involved providing false or misleading information via email or another messaging platform; and 21 percent involved abusing permissible access to computer systems. A higher proportion of frauds aided by technology may be skirting internal controls designed to detect them. Twenty-five percent of frauds significantly enabled by technology were detected by accident rather than by other means, whereas 10 percent that did not use technology were spotted by accident. A Major Culprit: Weak Controls Fraud is less likely to occur in companies with strong controls that monitor for unusual transactions through deploying analytical routines, or where the company invests in resources to defend against fraud, such as an internal audit function. However, despite the increasing threat of newer types of frauds, such as cyber fraud and continued traditional forms of wrongdoing, companies are not focusing on strengthening controls. Weak internal controls contributed to 59 percent of frauds in North America. "In addition to ensuring internal controls are thoughtfully designed, companies should deploy effective training and instill a culture of integrity so that controls are properly executed," said Ostwalt. "Companies should also adopt new controls as their risk profiles change. Ongoing risk assessments can help cost-constrained companies ensure they are properly investing in such controls." Additional Findings
Who is Today's Fraudster in North America?
About the Survey Global Profiles of the Fraudster is based on a questionnaire asking KPMG Forensic professionals worldwide for details about 750 fraudsters investigated between March 2013 and August 2015 in 81 countries. About KPMG LLP KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 174,000 professionals, including more than 9,000 partners, in 155 countries. Contact: Michael Rudnick Photo - http://photos.prnewswire.com/prnh/20160524/371350-INFO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/technology-rarely-leveraged-to-spot-fraud-while-perpetrators-advance-tech-enabled-schemes-kpmg-study-300273932.html SOURCE KPMG LLP |