Strategy & Leadership

Manufacturing

Africa

Africa

Manufacturers as a whole are less worried than those in other sectors about corporate fraud.

  • The figures for perceived vulnerability to corporate fraud within this sector are generally about the same as the overall average, although in some instances they are slightly lower. Only in one area, procurement fraud, is vulnerability perceived to be higher than average.
  • Spending on the leading anti-fraud strategies is also less widespread in this field than among the overall survey respondents, especially for IT measures (used at 59% of manufacturers against 70% overall), management controls (54% to 64%) and staff screening (48% to 57%). Future investment in these fields also looks set to lag behind that by other sectors.

In practice, however, little reason exists for complacency.

  • Manufacturers have experienced higher than average incidences of several types of fraud, including: theft of physical assets (47% compared with 34% for the overall sample), corruption and bribery (28% compared with 19%), financial mismanagement (26% compared with 20%) and intellectual property theft or counterfeiting (23% compared with 13%).
  • The loss per firm for this sector is slightly above average, as is the proportion of firms suffering from at least one form of fraud in the past three years.
  • The growth in exposure to fraud is hitting more companies in this industry than on average (88% compared with 81%). The necessities of globalised competition mean that entry into new markets, IT complexity and increasing collaboration between businesses are all increasing the risk of fraud at a faster rate than elsewhere.

Manufacturing companies need to understand better the degree of risk they face, and to invest accordingly.

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