Fraud Trends in Japan - KPMG Fraud Survey Report 2010

Foreword

In recent years, the social responsibility of organizations has been called into question more than ever, which means that we are approaching an era in which the occurrence of fraud and its response can significantly impact the existence and growth of organizations. In order to respond to this change in the business environment, it is essential for organizations to establish and operate an effective risk management system with a focus on fraud risk.

Based on the responses to a questionnaire sent out in March 2010 by KPMG in Japan, this survey aims to shed light on current fraud trends and the controls that organizations have in place to prevent and detect fraud in the current environment. This is the third fraud survey we have conducted, following those in 2006 and 2008

The questionnaires were sent to directors responsible for accounting and finance at 3,803 companies listed in Japan. We received responses from 515 organizations (approximately 14%), and this survey is based on this information. We would like to take this opportunity to thank all of those who have participated in this survey.

We hope this survey will aid you in the establishment and operation of an effective fraud risk management system.

Please note that the explanations of the survey results contain observations and opinions of the authors.

Table of Contents

1. Executive Summary
2. Survey Overview
3. Fraud Trends
   • Experience of Fraud by Company Size
   • Types of Fraud
   • Fraud by Industry
   • Fraud-Related Loss
   • Discovery of Fraud
   • Time Elapsed till Discovery
   • Motives and Background
   • Perpetrators’ Characteristics
   • Fraud Trends Related to Overseas Operations and Transactions
   • Use of External Experts
4. Establishing The Framework for Fraud Prevention and Detection
   • Effectiveness of Internal Control Report System
   • Utilization of Whistleblower System
   • Use of Internal Audit
   • Computer Assisted Audit Techniques (CAAT)

If you would like to obtain whole report, please contact at fasmktg@jp.kpmg.com