Fraud widespread

Some 77% of construction companies have suffered from corporate fraud in the past three years, according to a survey by risk consultant Kroll. The report also says 87% of companies surveyed felt their exposure to fraud had increased over the past three years, with an average loss of US$ 4.5 million per company during that period.

The report said the main reasons for the higher fraud in construction are high staff turnover, entry into new markets and increased joint-venture work.

According to Kroll, the construction industry suffers from a much higher incidence of corporate fraud than other industries. Theft of physical assets, corruption and bribery, financial mismanagement and regulatory and compliance breaches are cited as the areas of frequent loss.

“The risks of fraud for business are greater today than in the past,” said Andres Antonius, president of Kroll's Consulting Services Group. “The which of a fraud may be suffcient to place a company under severe scrutiny or in financial distress.”