ATLANTA – The Network, Inc., a leading provider of governance, risk and compliance (GRC) solutions, and BDO Consulting, a division of BDO USA, LLP, today announced the first quarter 2011 findings of its Quarterly Corporate Fraud Index™, a comprehensive examination of fraud incident report activity from almost 15 million employees worldwide.
For the first quarter of 2011, the Fraud Reporting Percentage (FRP), a statistic measuring fraud reporting in comparison to all compliance reporting activity from more than 1,000 organizations worldwide, was reported at 20.3 percent. The FRP statistic rose by more than 60 basis points since last quarter. FRP has increased in each of the last three quarters and stands at its highest mark since the second quarter of 2009.
Other first quarter 2011 findings include the following:
“Looking at the past seven years of data, this quarter’s fraud index is at a near-record high,” said Luis Ramos, chief executive officer of The Network. “This quarter’s FRP is only 10 basis points lower than it was in 2009, one of the worst years for business on record. The increase is in line with what we are hearing from financial analysts and reinforces the trend that even in a recovering economy, fraud reporting is still on the rise.”
First quarter comparisons of FRP for the past seven years are as follows:
First quarter comparisons of FRI for the past seven years are as follows:
“With so much attention paid recently to fraud-focused legislation – the FCPA, UK Bribery Act, the Dodd-Frank Act – it’s disturbing that fraud remains at such a high level, and continues to show an increase,” said Timothy Mohr, Certified Fraud Examiner and partner at BDO Consulting. “Without measures such as awareness and ethics hotline programs, incident management systems, investigatory practices, and tools for tracking and analysis, corporate enterprises would feel an even bigger bite from fraud.”
The Quarterly Corporate Fraud Index is compiled from actual incidents reported by clients of The Network and is analyzed by The Network and BDO Consulting. Fraud-related incidents include reports on corruption and fraud, theft, misuse of assets, conflicts of interest and FCPA violations.
For more information regarding the Quarterly Corporate Fraud Index, visit www.tnwinc.com or email corporatefraudindex@tnwinc.com.
About The Network, Inc.
The Network, Inc. is a leading provider of governance, risk and compliance solutions that help organizations mitigate risk and promote organizational compliance. Through the integration of on-demand software and services, The Network helps clients identify, communicate, resolve and mitigate risk issues and incidents. Established more than 28 years ago, The Network serves thousands of organizations in every industry, including nearly 50 percent of the Fortune 500. For more information, visit www.tnwinc.com.
About BDO Consulting
BDO Consulting provides litigation, investigation, business restructuring and risk advisory services to clients in the United States and internationally. Our highly experienced and well-credentialed professionals leverage the global industry and accounting knowledge of the BDO international network, providing rapid, strategic advice to assist our clients.
BDO Consulting is a division of BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited. BDO International Limited is a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. www.bdoconsulting.com
For the first quarter of 2011, the Fraud Reporting Percentage (FRP), a statistic measuring fraud reporting in comparison to all compliance reporting activity from more than 1,000 organizations worldwide, was reported at 20.3 percent. The FRP statistic rose by more than 60 basis points since last quarter. FRP has increased in each of the last three quarters and stands at its highest mark since the second quarter of 2009.
Other first quarter 2011 findings include the following:
- FRP (fraud-related reports versus all reporting activity) increased one-tenth of a percent – from 20.2 percent to 20.3 percent – compared to the same quarter in 2010
- Fraud-Related Incidents (FRI), the total number of reported fraud-related incidents, increased four-tenths of a percent compared to the same quarter in 2010
- In comparison to the fourth quarter 2010, FRI increased 3.3 percent during the first quarter of 2011
- First quarter fraud incident volume has steadily risen – by 1,000 basis points, or almost doubling – since the 2005 inception of the Quarterly Corporate Fraud Index
“Looking at the past seven years of data, this quarter’s fraud index is at a near-record high,” said Luis Ramos, chief executive officer of The Network. “This quarter’s FRP is only 10 basis points lower than it was in 2009, one of the worst years for business on record. The increase is in line with what we are hearing from financial analysts and reinforces the trend that even in a recovering economy, fraud reporting is still on the rise.”
First quarter comparisons of FRP for the past seven years are as follows:
- 1Q 2005 = 10.0%
- 1Q 2006 = 10.9%
- 1Q 2007 = 14.3%
- 1Q 2008 = 16.6%
- 1Q 2009 = 20.6%
- 1Q 2010 = 20.2%
- 1Q 2011 = 20.3%
First quarter comparisons of FRI for the past seven years are as follows:
- 1Q 2005 = 2530
- 1Q 2006 = 2948
- 1Q 2007 = 4435
- 1Q 2008 = 4943
- 1Q 2009 = 5439
- 1Q 2010 = 6089
- 1Q 2011 = 6111
“With so much attention paid recently to fraud-focused legislation – the FCPA, UK Bribery Act, the Dodd-Frank Act – it’s disturbing that fraud remains at such a high level, and continues to show an increase,” said Timothy Mohr, Certified Fraud Examiner and partner at BDO Consulting. “Without measures such as awareness and ethics hotline programs, incident management systems, investigatory practices, and tools for tracking and analysis, corporate enterprises would feel an even bigger bite from fraud.”
The Quarterly Corporate Fraud Index is compiled from actual incidents reported by clients of The Network and is analyzed by The Network and BDO Consulting. Fraud-related incidents include reports on corruption and fraud, theft, misuse of assets, conflicts of interest and FCPA violations.
For more information regarding the Quarterly Corporate Fraud Index, visit www.tnwinc.com or email corporatefraudindex@tnwinc.com.
About The Network, Inc.
The Network, Inc. is a leading provider of governance, risk and compliance solutions that help organizations mitigate risk and promote organizational compliance. Through the integration of on-demand software and services, The Network helps clients identify, communicate, resolve and mitigate risk issues and incidents. Established more than 28 years ago, The Network serves thousands of organizations in every industry, including nearly 50 percent of the Fortune 500. For more information, visit www.tnwinc.com.
About BDO Consulting
BDO Consulting provides litigation, investigation, business restructuring and risk advisory services to clients in the United States and internationally. Our highly experienced and well-credentialed professionals leverage the global industry and accounting knowledge of the BDO international network, providing rapid, strategic advice to assist our clients.
BDO Consulting is a division of BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited. BDO International Limited is a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. www.bdoconsulting.com