Small and medium-sized companies in Germany have been found to be rather negligent when it comes to providing efficient structures against economic crime. They often look for fraud in the wrong place.
Smaller companies in Germany tend to be far too careless about potential economic crime risks, a fresh study by the auditing and advisory group KPMG revealed on Tuesday.
A poll among SME managers across the country saw 83 percent of the respondents unaware of any big security risks, while 81 percent believed that anti-crime protection mechanisms in place were absolutely sufficient.
A large proportion of the mangers polled cited product piracy and data theft by people from outside their company as the biggest security headaches, basically ignoring empirical data according to which at least half of all economic crimes registered in small and medium-sized companies were actually committed by their own staff members.
How to identify a fraudster
KPMG claimed the biggest damage done resulted from staffers engaged in embezzlement and misappropriation in their own firms. The advisory group put the average losses incurred per case at 300,000 euros ($389,000), while Germany's Federal Crime Office (BKA) estimated the nationwide damage done by economic crime in the country amounted to more than 4.0 billion euros in 2011.
In an earlier international analysis of global economic crime trends, KPMG had narrowed down the profile of a typical fraudster to help companies become more alert and responsive.
Among other things, it maintained the typical fraudster was male, 36 to 45 years old, worked in a finance-related position and had been employed by the firm in question for at least 10 years. Personal greed and tough budget targets were singled out as the main motivation for committing crimes.