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Fraud is on the rise: step up to the challenge
Organisations’ approach to fraud Fraud is not a standalone risk Fraud has long been an area of concern for businesses. According to Risk in Focus 2022, our latest annual survey of senior internal auditors across Europe, 20% of respondents said fraud, bribery and the criminal exploitation of disruption was a top 5 risk. Most of the participants of our roundtable discussions indicated that although fraud was not a top 5 risk, it was considered an important one and often appeared as a top 10 risk on the risk register. However, several participants pointed out that fraud was blended into other risk areas, such as economic or financial crime, financial
stability, or cybersecurity. This has been a recurring theme across all the roundtable discussions: fraud is not a standalone risk; it interconnects with a range of other risks. To illustrate this point, Jeremy Lawson, Head of Internal Audit at Persimmon Homes said: “Fraud does not necessarily meet our principle risk definition. We have a separate fraud risk register with about 60 or 70 types of fraud, but this did not justify having fraud as a principal risk in its own right. However, we probably all have cyber security as a principal risk. And what does cyber risk look like if you break it down? It could be a fraudulent mass data breach.”
“You can look at risks from a process point of view, in which case every process has fraud risk associated to it. Or you can look at macro risks, such as cybersecurity, which is in itself a fraud risk. Fraud is really a subset of every risk.” Head of Internal Audit from a manufacturing organisation
