Fraud widespread

77% of constructioncompanies have suffered from fraud in the past three years, according to a survey by risk consultant Kroll.

The report also says 87% of companies surveyed felt their exposure to fraud had increased over the past three years, with an average loss of US$ 4,5 million (€ 6,4 million) during that period.

The report found the main reasons for the higher risk of fraud in construction are high staff turnover, entry into new markets and increased joint-venture work.

According to Kroll, the construction industry suffers from much higher levels of fraud than other industries. Theft, corruption and bribery, financial mismanagement and compliance breaches are cited as the areas of frequent loss.

“The risks of fraud for business are greater today than in the past,” said Andres Antonius, president of Kroll's Consulting Services Group. “Even the whiff of a fraud may sometimes be sufficient to place a company under severe scrutiny or in financial distress.”

The report draws on a survey by the Economist Intelligence Unit.