Workers ‘fleece bosses of $398 million’

LAX security has allowed some Australian employees to fleece their bosses to the tune of $398 million, according to a recent study.

Forensic accounting firm Warfield & Associates investigated 89 cases of employee fraud between 2001 and 2012, finding that in many cases it was simply a matter of workers sending money to their own bank accounts.

Report author Brett Warfield says employee fraud is costly, and reveals governance weakness among some of the country’s major businesses.

“The sums of money that were stolen from some of the organisations were incredible, with nine cases involving more than $10 million,” he says.

“The ease with which perpetrators in many organisations used the Electronic Funds Transfer (EFT) system to simply credit their own bank accounts is very concerning.

“We see EFT fraud as one of the major fraud

EFT was used in 43 of the cases investigated, and study authors warn that the trend is likely to rise, as cheques are phased out of employee payments.

However, while fraud is inevitable, companies need to focus on systems that will enable its quick discovery, the authors say in a statement.

“No organisation can completely stop fraud from happening,” they say.

“However, a number of these organisations had large frauds occurring that were not discovered by their internal controls and reviews over what can only be regarded as an incomprehensible period of time.”

The study names the banking sector as the most affected – accounting for a third of frauds (or 30 in the study).

Gambling addiction was the reason in more than half (or 46) of the cases studied, while improving lifestyle was the motivator in 35 cases.