Businesses Unaware of Growing Bribery, Corruption Threat
Media release – embargoed until 6.00am Monday 18th March 2013
NZ Businesses Unaware of Growing Bribery And Corruption Threat
New Zealand businesses are too complacent about the growing risk of bribery and corruption, according to KPMG’s Fraud Bribery and Corruption Survey released today.
One organisation surveyed suffered a $1.5m loss resulting from ‘inappropriate selection of third party distributors.’
Although the 140 survey respondents reported relatively few incidents of bribery and corruption, the level of complacency around the risks gives most cause for concern. More than 38% of survey respondents did not have clear anti-bribery and corruption policies and procedures in place.
Stephen Bell, from KPMG’s Forensics team, says new UK anti-bribery law which came into effect in April 2011 has significant implications for New Zealand businesses operating overseas.
“Any New Zealand business with operations or a presence in the UK can potentially be prosecuted under the Act.” Says Bell.
“Legislation in the US also has international reach. Yet in the survey, when asked whether or not they were aware of anti-bribery legislation in countries where their organisations operated, over half of respondents said ‘no’.”
The Ministry of Justice has also urged New Zealand organisations to seek advice on their exposure to the UK anti-bribery legislation.
In other findings of the KPMG Fraud Bribery and Corruption Survey, fraud continues to be a growing problem in New Zealand. The total value lost to fraud is trending upwards, having increased by almost 8% since the 2008 survey.
Respondents believed, on average, that only 50% of all fraud losses are being detected. The current survey showed that ‘personal financial pressure’ was the number one motivating factor among perpetrators of fraud. This replaced ‘ greed/lifestyle’ from the 2008 survey, possibly reflecting the tougher economic environment.
PDF of the full report
the KPMG Fraud Bribery and Corruption Survey
The KPMG Fraud Bribery and Corruption Survey is a biennial research project undertaken by KPMG New Zealand. Over the past 20 years it has developed into one of the most credible and widely quoted surveys of the experience of fraud among New Zealand and Australian organisations. KPMG also compiles a regular Fraud Barometer, published every six months, which analyses the number of large fraud cases before the New Zealand courts.
These and other publications are available at www.kpmg.co.nz (go to Services>Forensics).