Study: Firms losing 5pc of revenue to fraud

By O’Brien Kimani

Companies are losing five percent of their revenue to fraud and bribery according to a new study released by financial services firm Ernst and Young.

The survey says 76 percent of frauds in companies is perpetuated by senior managers and board directors.

The survey says the financial services sector is the most affected due to their nature of handling cash. The report further says most employees done feel the urge to resign when implicated in unethical issues.

In Kenya cyber fraud is becoming a major problem impacting many companies and government institutions.

Though official statistics are hard to come by cyber fraud losses are running into tens of billions of shillings.

The study covering more than 4000 companies says local companies are losing around five percent of their revenue to fraud translating into billions of shillings every year.

The report says 79 percent of the respondents feel bribery and corrupt practices happen widely in the country though law enforcement agencies are doing much to arrest the situation.

Ernst and Young head of Fraud in Africa Sharon Van Rooyen says most companies do not have a robust system of dealing with fraud leading to a rise in the vice.

The study further says the flow of foreign direct investment in to the country is likely to slow down due to uncertainty caused by the forthcoming elections.

The most common form of cyber fraud is malware attacks Phising and web based attacks that account for more than 50 percent of all cyber related crimes.

The report estimates more than 200 trillion shillings are lost every year to online crime globally. The research was carried out between September last year and January this year covering large companies in 41 countries.

  

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