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Identifying and responding to risks of serious fraud in Australia and New Zealand

Abstract

Drawing upon data collected for the Australian Institute of Criminology and Pricewaterhouse Coopers study, Serious Fraud in Australia and New Zealand (2003), this paper identifies key circumstances or anomalies that were present in the cases of serious fraud examined. These fraud warning signals or risk factors are discussed under the headings of: prudential failures; personnel failures; accounting / auditing failures; security failures; and regulatory failures. A table summarises fraud prevention measures for each of the risk factors discussed. Given that the average length of offending identified in the study was two years, the paper concludes that fraud control policies are of critical importance for organisations in order to ensure speedy detection.

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