Fraud on the increase

AT least 1 500 corporate crimes were reported through the Deloitte Tip-offs Anonymous facility in the first quarter of this year, indicating an increase in the prevalence of fraud.

Deloitte Tip offs Anonymous is an independently managed ethics and fraud hotline service offered by Deloitte risk advisory that allows an organisation’s stakeholders, particularly its employees, customers, suppliers as well as members of the public to use confidential and free channels of communication to report unethical activities occurring within an organisation.

Speaking at a workshop on managing the business risk of fraud through internal control systems, Deloitte regional manager (risk advisory) for Zimbabwe, Zambia and Malawi, Willie Majo expressed concern over the increasing number of fraud cases.

“Fraud, theft, embezzlement abuse and corruption have reached alarming levels in all sectors of the economy,” Majo said “The impact and risk of fraud is now much higher than before. Between January and March 2010 more than 1 500 reports have been made to the hotline,” he said.

He revealed that 25% of the reports were on theft, 22% on fraud and 15% on corruption. The retail sector, Majo said, accounted for 29% of the reports while the manufacturing sector made up 14% with the banking sector accounting for 8% of the reports.

Majo said the risk had greater impact since the adoption of multi-currencies last year because the currency’s value remained stable unlike in 2008 where the value of the Zimbabwe dollar was continuously eroded by inflation.

He said the major challenge they faced since they introduced the facility was resistance from some company executives who feared exposure through the facility.

 

Kudzai Kuwaza

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