Fraud cases surged during the Covid-19 pandemic and are only likely to increase in the coming months, multinational accounting firm KPMG says.
KPMG partner Stephen Bell said there was usually an increased risk of fraud in any economic downturn, as people experienced greater financial pressure and may rationalise taking what did not belong to them.
He said KMPG was seeing the three classic fraud factors coincide – motive, opportunity, and rationalisation.
“The motivation can be anything, it can be obviously economic concerns, it can be the loss of a loved one, it can be lifestyle pressures.”
He said Covid-19 had created an opportunity for potential fraudsters with the relaxation of normal working conditions.
“Employees who are working offsite, working remotely, using their own computers, circumventing controls that otherwise might be in place.”
He said motive and opportunity compounded, leading people to rationalise fraud.
Since the country went into lockdown, there has been a wide range of corrupt activity, Bell said.
“There’s been examples of frauds around the wage subsidy, around the Covid-19 relief loans and consumer lending.”
He said insurers had been concerned about increased claim volumes.
“They have actually been running tests to determine whether there is a high volume of claims on individual policies which has resulted in them identifying both externally perpetrated frauds as well as internal frauds by [businesses’] own employees.”
Bell said businesses needed to review their controls and the loopholes that were created during the lockdown, as he expected fraudulent behaviour to increase as the recession set in.
He said the government had already acknowledged the risk by increasing the Serious Fraud Office’s budget by more than 20 percent to $12.7 million.