Feature
Issue No. 29 - June/July 2006
How many firms fear exposing a fraudster?
by Alan Green
About 32% of SMEs will suffer fraud during the lifetime of the business – from credit card fraud to cybercrime – or so experts think. The shadowy nature of the crime makes accuracy virtually impossible.
Many organisations are too embarrassed to admit it has happened to them. Others fear that suppliers or customers will look unfavourably upon them.
“The result is that many frauds never get exposed,” says Alan Green, of Hayes Knight Accountants and Business Advisors.
Alan says some who discover frauds keep the detail secret for fear of providing a “road map” for other would-be fraudsters.
“There is also the ‘It could never happen here’ attitude of complacency, common in many Australian companies, which is a huge roadblock to discovering how much fraud is truly occurring,” he says.
Fraud is a particular concern for accounting staff or financial controllers of an organisation. People in those positions spend much of their time ensuring that their organisation, and the financial statements that reflect the organisation’s position and performance, are accurate.
“In many cases of fraud, those investigating are left a distinct feeling that they haven’t uncovered all of the wrongdoing,” Alan says. “With some frauds and the methods employed to cover them up it is impossible to ascertain the total scope.
“And as companies and their financial systems evolve and change, so do the opportunities f...
