10 hours ago
New KPMG Study emphasizes need for robust internal controls and monitoring systems
55% of fraud involves collaboration, typically featuring a group of two to five people
Most common type of corporate fraud is misappropriation of assets (52%), including embezzlement or procurement
Primary fraud-detectors are whistleblowers or other informal sources (45%)
Dubai, UAE: As corporate fraud in the Middle East is reaching alarming levels, new research by KPMG, 'Global Profiles of the Fraudster,' highlights the evolving nature of white-collar crime and urges companies to strengthen internal controls and promote an ethical culture to effectively detect fraud. Findings reveal that weak controls are the prime reason for successful fraud attempts across a range of departments, including operations, finance, procurement, and even the CEO's office, with the typical fraudster being a long-standing, respected member of the organization, aged between 36 and 55 years.
The UAE's Ministry of Economy (MoEc) has been actively collaborating with federal and local government entities and the private sector to improve legislation around fraud. This effort has been instrumental in strengthening the UAE's stature as a leading global hub for commerce, business, and innovation. Last year, the Financial Action Task Force (FATF) dropped the UAE from its 'grey list', bolstering the country's anti-money-laundering efforts. Meanwhile, Saudi Arabia's Anti-Cyber Crime Law is actively addressing unauthorized access, data interference, and fraud. Despite these measures, fraudsters continue to exploit every loophole, even resorting to collusion to cover their financial crimes.
Nicholas Cameron, Partner and Head of Forensics at KPMG Middle East, said: 'The MENA region remains a prime target for corporate fraud, drawn by the rapid economic growth, personal wealth, and fast tech adoption. Organizations must proactively strengthen their defenses with advanced analytics, real-time fraud detection, and regular strategy reviews, while fostering transparency and cross-department collaboration to reduce opportunities for collusion.'
KPMG's insights revealed that nearly half (55%) of fraud involves collaboration, typically featuring a group of two to five people, with most cases (78%) below US$200,000 in value. The most common type of fraud is misappropriation of assets (52%), notably embezzlement or procurement. Globally, although 55 percent of the fraudsters colluded with others, this proportion has fallen by 7 percent since KPMG's previous survey — possibly because technology is presenting more opportunities to act alone. The No. 1 method of detection was tip-offs (45 percent), either via a formal whistleblowing hotline or an anonymous, informal source.
Paradoxically, the study showed that many frauds are still committed using traditional methods, despite the prevalence of technology. This suggests that while technology can aid in detection, fundamental controls remain essential. Even so, organizations must stay informed about the latest technological advancements, invest in cybersecurity measures, and train employees to recognize and respond to cyber threats. The study underscored a 'speak-up' culture where employees feel safe to report suspicious activities through formal whistleblowing channels, alongside regular training on ethical behavior and fraud awareness, to prevent fraud.
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