Organisations lose an estimated 5% of their annual revenues to fraud, according to a 2012 study by the Association of Certified Fraud Examiners (ACFE).
To help shine a spotlight on this global problem, Bytes Universal Systems, as a corporate sponsor of ACFE South Africa, is participating in International Fraud Awareness Week from 3 to 9 November, 2013, as an official supporter to promote anti-fraud awareness and prevention.
Fraud is a global problem, but it’s one that is particularly relevant in South Africa. White-collar crime is on the rise, and South Africa is now ranked 64th out of the 182 countries listed on Transparency International’s corruption perception index. Fraud is another barrier for start-up businesses to face, and thus affects much needed job creation.
The Minister of Justice, Jeff Radebe, recently confirmed that fraud was a priority for government and announced record number of investigations and arrests in this area. The opening this week of the first annual anti-corruption conference of the South African Social Security Agency (Sassa) by Social Development Minister Bathabile Dlamini further highlighted the scope of the problem.
“Fraud is a scourge in our country,” says Mark Neethling, divisional manager: Business Solutions at Bytes Universal Systems. “Bytes in partnership with the ACFE and vendors of software to detect financial crime are working together to spearhead initiatives to combat fraud on a number of fronts.”
In its 2012 Report to the Nations on Occupational Fraud and Abuse, the ACFE found that:
* Fraud schemes are extremely costly. The median loss caused by the occupational fraud cases in the ACFE study was R1,4-million. More than one-fifth of the frauds involved losses of at least R10-million.
* Schemes can continue for months or even years before they are detected. The frauds in the study lasted a median of 18 months before being caught.
* Occupational fraud is a global problem. Though some findings differ slightly from region to region, most of the trends in fraud schemes, perpetrator characteristics and anti-fraud controls are similar regardless of where the fraud occurred.
* Small businesses are especially vulnerable to occupational fraud. These organisations are typically lacking in anti-fraud controls compared to their larger counterparts, which makes them particularly vulnerable to fraud.
* Tips are key in detecting fraud. Occupational frauds are much more likely to be detected by tip than by any other means. This finding reinforces the need for promoting awareness to foster an informed workforce.