Major fraud values in the second half of 2010 were the highest recorded.It is unsurprising most large-scale business fraud is committed by people in positions of authority - but it is worrying.
KPMG's fraud barometer for the second half of 2010 showed people in management roles were more likely to commit
fraud than lower level employees and generally misappropriated significantly higher sums.
Courts dealt with $100 million-worth of large-scale fraud during that period - $70m of which was committed by management.
These people are able to misappropriate such large amounts because they are trusted employees.
Managers are generally subjected to fewer checks than staff lower down the pecking order, have wider access to the various systems and have greater authorisation to meddle in them.
You do not employ somebody to run your business, or part thereof, unless you trust them. But the KPMG barometer goes to show everybody needs to be accountable to somebody. There need to be checks on everyone.
Just as trust and responsibility are higher for management roles, so too are temptations.
Major fraud values in the second half of 2010 were the highest recorded by the barometer since it started three years ago.
It would be easy to point to "the recession" or "the global financial crisis" and deduce that more managers have resorted to fraud because they were doing it tough.
There may be some truth in this. People in top management positions generally put in long hours and often shoulder immense responsibilities.
At a time when salaries were being frozen and bonuses wiped, some bosses may have decided they deserved more than they were getting and simply taken it.
But, as Watchdog Rotorua's Brett Wilson has previously said, in many cases the fraudulent behaviour has been going on for years. It was only when the recession hit that boards and business owners began looking more closely at where money was going and uncovered the extent of employee theft.
Implementing systems to make even top employees fiscally accountable will remove some of the temptation to commit fraud and those who do succumb will be caught earlier, with lower cost to the business and its investors.
Julie Taylor is business editor at The Daily Post
