Australian construction firms are more than 10 years behind the curve with their IT systems, leaving them vulnerable to fake vendors, contract rigging and billing fraud, according to advisory Grant Thornton.
Grant Thornton today reported that construction fraud was commonplace, and in some cases, “endemic”, across Australia, Canada, India, the UK and US, costing the industry about 10% of its revenues.
Of eight main types of fraud, Grant Thornton said Australian firms were most likely to face fictitious vendors and bid or contract rigging, followed by billing fraud, bribery or corruption, theft, and money laundering or tax avoidance.
The other two fraud types, change order manipulation and false representation, were found to be less common in Australia than elsewhere.
Grant Thornton warned that opportunities for fraud would grow in the coming months and years as the global economy and more construction kicked off.
Australian construction activity jumped to a 3.5-year high in September and last month, expanded for the first time since 2010, according to the Australian Industry Group’s Performance of Construction Index (PCI).
Grant Thornton recommended that companies adopt a zero-tolerance policy for fraud from the board down, be prepared to prosecute, adopt big data technology and encourage whistleblowing.
There’s more in the report.
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