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Employee fraud a serious risk to Australian firms

There are many reasons to consider undertaking a national police check on employees, including the necessity of preventing fraud in the workplace.

This point has been demonstrated clearly by a KPMG study into the state of fraud within Australia and New Zealand.* The survey found that the majority of fraud cases are coming from within a company, with 75 per cent caused by internal perpetrators.

The study highlighted that the average case of fraud in Australia and New Zealand is $3 million, with $373 million lost over the last two years as a result of corporate fraud.

While financial institutions were the most common targets, over $50 million was also lost from employee fraud in non-financial entities. Overall, 43 per cent of firms have experienced fraud within their operations.

When asked about the causes of fraud, many companies identified their internal processes as being too weak to identify criminal activity within the workplace. In fact, 47 per cent of respondents identified weak internal practices as a leading cause of fraud.

Among those who are committing the fraud, the most common reason is facing a serious income shortage, although greed also ranks highly as a motivator.

Companies do recognise fraud as a risk to their business and are implementing new practices that can protect against this activity. Among respondents who are implementing these strategies, 62 per cent are allocating more resources for internal monitoring. Many are also implementing internal and external policies and procedures that can help to identify criminal behaviour.

A national police check is one way of addressing this issue. As a screening mechanism, a police check provides transparent data and information relating to a person's criminal background. This gives employers the the opportunity to access greater information on an individuals suitability for a role. 

*KPMG Forensic – Survey of fraud, bribery and corruption in Australia and New Zealand, 2012.

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