The study also showed that 85% of fraud committed in state-owned entities was conducted by management.
COMPANIES that employ thousands of people were more susceptible to fraud than those that hire fewer people, according to research.
The study also showed that 85% of fraud committed in state-owned entities was conducted by management.
The study, conducted by KPMG, shows that 86% of companies that employed more than 10,000 people had been fraud victims.
In contrast, companies employing less than 100 people experienced less fraud.
Andre Sturmer, chief executive of Inoxico, said the reason fraud in parastatals was high could be due to people in management thinking there would not be more scrutiny of their actions than if they were in commercial companies.
Speaking at the MBD Credit Solutions' Commercial Conference, Sturmer said 84% of fraud in financial companies was committed by outsiders.
In non-financial companies, 37% of fraud was committed by management while 43% was committed by external people.
A study conducted by risk solutions company Inoxico revealed that in big companies, each director on average held 14 additional directorships in other companies.
Sturmer attributed this to company directors preferring to appoint their close professional associates.
"In South Africa, we largely do business based on relationships," he said.
"For instance, you would find that a company gives a directorship to an owner of its supplier because the company in question wants to procure goods at a cheaper rate and make more profit."
Sturmer said he also discovered that many companies did not know about the number of external directorships each director had.
"This means many directors could have a conflict of interest and companies need to implement more transparent systems."
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Bigger companies face more fraud
The study also showed that 85% of fraud committed in state-owned entities was conducted by management.
COMPANIES that employ thousands of people were more susceptible to fraud than those that hire fewer people, according to research.
The study also showed that 85% of fraud committed in state-owned entities was conducted by management.
The study, conducted by KPMG, shows that 86% of companies that employed more than 10,000 people had been fraud victims.
In contrast, companies employing less than 100 people experienced less fraud.
Andre Sturmer, chief executive of Inoxico, said the reason fraud in parastatals was high could be due to people in management thinking there would not be more scrutiny of their actions than if they were in commercial companies.
Speaking at the MBD Credit Solutions' Commercial Conference, Sturmer said 84% of fraud in financial companies was committed by outsiders.
In non-financial companies, 37% of fraud was committed by management while 43% was committed by external people.
A study conducted by risk solutions company Inoxico revealed that in big companies, each director on average held 14 additional directorships in other companies.
Sturmer attributed this to company directors preferring to appoint their close professional associates.
"In South Africa, we largely do business based on relationships," he said.
"For instance, you would find that a company gives a directorship to an owner of its supplier because the company in question wants to procure goods at a cheaper rate and make more profit."
Sturmer said he also discovered that many companies did not know about the number of external directorships each director had.
"This means many directors could have a conflict of interest and companies need to implement more transparent systems."
.