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Forensic accountants track crooks

ACCOUNTING firm KPMG has beefed up its Perth office to help catch corporate crooks.

Former National Crime Authority regional director Michael Cashman will head the firm’s WA forensic accounting practice.

Forensic accountants deal with the legal side of accounting. Fraud is a growing world problem because it is easy to move money around.

KPMG’s forensic practice will focus on fraud risk management and assessment, document management, asset tracing and catching money launderers. Money laundering is a growing concern in the Asia Pacific region.

KPMG Australian forensic accounting leader David Van Hamrigh said globalisation and privatisation had increased the risks of corporate fraud.

“And corporate restructuring has opened up even more opportunities for misbehaviour,” Mr Van Hamrigh said.

A 1999 KPMG report found corporate fraud cost Australian businesses about $240 million.

Both Mr Van Hamrigh and Mr Cashman believe this is only the tip of the iceberg. Some estimates put the annual cost of Australian corporate fraud at closer to $3.6 billion.

However, WA is seen as no better or worse than the rest of Australia when it comes to corporate fraud.

Mr Cashman said the most significant threat to companies came from within.

“About 80 per cent of corporate fraud is perpetrated by employees or management,” he said.

“More than 50 per cent of people caught committing frauds claim gambling as a motivatior.”

Mr Cashman said companies needed to put appropriate internal controls and procedures in place to stop fraudsters.

Orna APR’s John Westall believes the problem with WA businesses is that most managers are unwilling to admit there is a problem.

“In WA we have a lot of fraud prone industries – resources and engineering,” Mr Westall said.

“A lot of these companies operate in countries that are more fraud prone than Australia.

“With computers it is easier to shift money offshore and once it leaves Australia, there seems to be little interest in chasing it.”

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