Organisations with offshore operations are paying closer attention to corruption, fraud and political risk, according to Malcolm Shackell, a partner in forensic services at PricewaterhouseCoopers.

This is due in part to raised awareness about the public problems many organisations have had offshore in relation to issues such as corruption and bribery.

Commenting on a number of the latest fraud trends, Shackell also said that the most prevalent trend is the increase in the number of large scale, internal frauds coming to light in the 12-18 months since the end of the GFC.

These frauds are typically large scale, internal frauds which tend to be multi-transactional, are perpetrated over several years, are usually committed by a longstanding, trusted employee and are targeted at accounts payable, payroll and expenses – areas where funds ‘leave’ a business, Shackell noted.

“This trend follows a pattern seen after past economic downturns,” he said.

“The rise in activity has been experienced by investigators, auditors, regulators, law enforcement, insolvency practitioners and lawyers.”

Shackell also pointed to the emergence of organised financial criminals, often based offshore, looking to gain a toehold in Australia by buying assets like property.

“As a result, wary organisations are conducting more background due diligence on potential partners, employees, vendors and even customers,” he said.

Over the past five years there has also been a heightened level of awareness of the financial and reputational cost of fraud among Boards and executives, according to Shackell.

“During the GFC many organisations increased the focus on the cost line, where most fraud occurs, and this raised the profile of fraud on the corporate agenda,” he said.

Public reporting of major fraud incidents, such as the Clive Peters matter, also raised awareness and for many organisations this was a defining moment.

“There was a realisation that large internal frauds could happen anywhere and the consequences can be severe,” he said.

“The challenge for Boards and executives now is to maintain the heightened level of fraud awareness whilst many are moving to a growth mindset.”