Inaugural White Collar Crime and Fraud Risk Survey
Given the dynamic nature of white-collar crime and fraud, Protiviti and the Economic Crime and Justice Studies Department at Utica College conducted a comprehensive survey of white-collar crime and the fraud risk management frameworks used to combat them.
While there were a number of notable findings that emerged from our research, one thing seems quite clear: The majority of organizations are not well positioned to conduct investigations. Many organizations conducting investigations are under-resourced and are spending more time “putting out fires” than focusing on fraud detection and applying a consistent investigative approach. The majority of companies that are in this situation will very likely find it extremely difficult to identify the responsible parties and receive meaningful cooperation credit for having done so.
Managing Fraud Corruption Risk
- 47% have internal resources with limited availability to address fraud risk
- 17% have a “well defined” fraud risk strategy
- 52% conduct a formal fraud risk assessment at least annually
- 27% don’t conduct any formal fraud risk assessment
- 55% of midsize companies and 68% of small companies lack a fraud detection program
- 35% do not conduct due diligence on business intermediaries (third parties) prior to onboarding
- 6% have a high level of confidence in their vendor fraud and corruption risk oversight
- 14% utilize ongoing forensic data analysis to identify potential red flags and fraud indicators
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Other Notable Takeaways from this Year's Study:
- Most companies are still reactive, rather than proactive, in managing fraud risk and responding to fraud and corruption once issues have been identified because they lack resources and strategy.
- Few companies are availing themselves of the tools and best practices for mitigating fraud risk.
- Third-party fraud and corruption risk is barely on the radar of most organizations.
- Organizations without strong fraud detection and reporting programs face a higher risk of damaging “whistleblower” disclosures.
- The trend toward “consultative” internal audits must be weighed against the deterrent effect of surprise audits.
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