A report by Strategic Treasurer and Bottomline Technologies has found that the most-reported attempted fraud for corporate treasury is the good old cheque, reported by 39% of companies.

The 2016 Survey on Treasury Fraud and Controls aims to recognise weak spots in treasury practices and identify ways of improving control.

The survey received responses from more than 300 companies, 60 per cent of which are North American.

Corporate fraud prevention 'completely inadequate'

It noted that fraud techniques and technologies are changing so rapidly that companies have to run to keep up: “What was a leading practice several years ago can quickly become the minimum standard (the standard of good corporate conduct) and, in some situations, completely inadequate.”

But surprisingly it's not the new technologies and e-payments that are attracting the attention of criminals, but the good old-fashioned forms of paper payment. Check fraud was the type of fraud reported most – by 39 per cent of the survey's respondents. Wire fraud and impostor fraud was reported by 31 per cent; ACH fraud by 25 per cent and check conversion fraud by 23 per cent.

Employees were the source of fraud at 36 per cent of the companies polled and yet few companies carry out background checks on all new staff.

Treasury fraud and controls survey findings

The survey also found that:

• 57 per cent of firms have no control framework. The report's authors write: “Given what we have seen with regard to fraud over the past few years, this is deeply disturbing.”
• Only 42 per cent of firms have formally assigned fraud monitoring roles and responsibilities.
• 35 per cent of organisations do not screen for sanctioned parties at any time in their processes. The report's authors write: “They instead rely on banks to, hopefully, catch the problem. By then it is a reportable event.”
• 24 per cent of firms in the survey indicated that they reconciled 100 per cent of their bank accounts on a daily basis.
• 70 per cent of firms can see 90-100 per cent of their bank account balances and activity on a daily basis.
• 70 per cent of respondents indicate their firm had a policy on ABAC (anti-bribery and corruption).

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CTMfile take: This is a sobering insight into how open to fraud attacks many companies are. Carrying out basic procedures, such as recurrent background checks on all staff and introducing a control framework, will go some way to protecting companies from what are potentially hugely damaging losses.