Forty percent of the respondents felt highly or moderately vulnerable to corruption and bribery.
In the past year, nearly three quarters of the companies (72 percent) polled “were dissuaded from operating in a particular country or region because of the heightened exposure it would bring to fraud,” Kroll said.
Latin America (cited by 27 percent of all respondents) saw the most businesses turn away, with Africa second at 22 percent.
Overall, three quarters of the companies (75%) were victims of a fraud incident in the past year, up 14 percent in just three years.
The biggest fraud threat came from within. Of the companies where fraud occurred and the perpetrator was identified, four in five (81 percent) incidents involved at least one insider, up from 72 percent in the previous survey, Kroll said.
More than a third of the fraud was perpetrated by a member of senior or middle management, 45 percent by a junior employee, and 23 percent by an agent or intermediary.
A third of the executives responding to the survey said high staff turnover was the main cause of increased exposure to fraud. The next highest driver of vulnerability to fraud cited by respondents was greater outsourcing (16 percent).
Four in five respondents (80%) said they believe their organizations became more vulnerable to fraud in the past year.
Daniel Karson, Kroll’s chairman, said the 2015 report showed “how vulnerable to fraud companies are feeling.”
“What our report drives home is that fraud is often an inside job’ and that companies must address both internal and external relationships if they are to most effectively protect their money, property and private data,” Karson said.
Overall, 69 percent of businesses surveyed suffered a financial loss as a result of fraud, up from 64% in the previous survey.
Theft of physical assets was the most common fraud experienced (22 percent), followed by vendor, supplier or procurement fraud (17 percent), and information theft (15 percent).
Kroll said its annual global fraud survey was carried out by the Economist Intelligence Unit. The respondents were 768 senior executives worldwide from a broad range of industries and functions. The survey was conducted from January through March of 2015.
The 2015 Kroll Global Fraud Report is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.