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Country Risk Climate: ‘Nearly three quarters of European firms affected by fraud’

worldboxThe number of companies affected by fraudulent activity has jumped year-on-year to 71 per cent, according to over 900 senior executives polled globally in the latest Kroll Global Fraud Report.

This is sharply up from their previous year’s findings, which indicated 63 per cent of European companies were affected by fraud. The new 2013 report further noted an increase in every of the seven categories of fraud it measures.

The global average of businesses reporting to have been a victim of fraudulent activity is put by the report at 70 per cent. The largest increase was in vendor, supplier or procurement fraud, which it says now affects 17 per cent of firms, up from nine per cent the year before.

The seventh annual fraud report, commissioned by Kroll along with the Economist Intelligence Unit, finds the globalisation of commerce is increasing fraud exposure, as companies branch out into overseas markets where there is more risk, and increase their reliance on outsourcing.

Business dealing with markets like Africa, India and Latin America carries the most risk, increasing the vulnerability of 30 per cent of companies to fraud, while half of all firms said they would not presently consider expanding into these and other particular markets overseas because of the risk of corruption.   One of the highest general fraud levels identified by territory this year was in India, where incidences of fraud committed by vendors and suppliers were well above the global average, as well as the BRIC average.

Source: Kroll / Worldbox

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