More executives dipping into the tills

As senior executives of SA companies get increasingly frustrated at being unable to maintain their free-spending lifestyles because of the ever-growing cost of living, a number of them have been caught with their fingers deep in the till, reports Business Report. Guy Brazier, the CEO of Deloitte Tip-offs Anonymous, a leading local hotline service provider said there was an increase in senior executives abusing their powers and circumventing key company controls to commit fraud. The number of executives involved in fraudulent action has doubled in the past three years. Brazier could not give exact figures but said tip-offs had risen from about 6 000 three years ago to more than 12 000. Full report in Business Report

Brazier says the losses are not only monetary. 'They sell strategic information to competitors. We can literally track the volume of tip-offs in line with interest-rate movements,' he said. Brazier said the amount of strategic information sold to competitors varied from potential targets for acquisition, organisational restructuring plans and strategic plans, to new products coming to market. With the introduction of certain legislation and governance guidelines, Business Day notes, whistle-blowers are afforded greater protection and companies, both in the public and the private sector, are getting more serious about instituting whistle-blowing policies and frameworks as opposed to simply having a code of ethics or code of business conduct. Mervyn King, chairman of the King committee on corporate governance, said that the third King report, due for release later this year, would contain terms on whistle-blowing and the role of internal audit. Full Business Day report

Accountants BDO Stoy Hayward warn that businesses need to be aware that their biggest threat is not organised criminal gangs, but their own 'trusted' internal management and people they do business with every day'. The warning comes after it found that fraud within the business sector increased by 74% in the past year and cost British businesses about £705m in the past six months, says The Guardian. BDO's Fraudtrack report said the rise was the largest since their research began in 2005. Simon Bevan, head of BDO's fraud unit, said that almost half of reported fraud cases were accounted for by management fraud. Rising personal debt and greed were the main reasons tempting people to defraud companies. Full report in The Guardian BDO report