33% of Corporate Fraudsters are CEOs

A recent KPMG global survey on corporate frauds has found that executives and directors on company boards are the biggest perpetrators of corporate fraud. In fact, the involvement of top bosses in corporate frauds has more than doubled since 2007 and results in 33% of such cases. The survey, which tracked 348 fraud investigations KPMG member firms carried out in 69 countries, revealed an average financial loss of $1 million in every case of corporate fraud. In 2010, the Association of Certified Fraud Examiners estimated the total value of corporate embezzlement at $2.9 trillion. The average corporate fraudster is male; 36 to 45 years old; works in the finance function or in a finance-related role; holds a senior management position; and is employed by the company for more than 10 years. More importantly, the survey highlights how weakening control structures make the opportunity to commit fraud easier. It is time for companies to consider how they contribute to fraud when failing to detect or respond to lapses or gaps in controls, or by setting extremely steep targets.

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