Gambling has emerged as the most common motive for fraud. Almost half (44 per cent) of the total value of fraud was attributed to gambling, a two-fold increase over the 2006 survey.

"Our typical fraudster is a 38 year-old male with no known history of dishonesty," explained KPMG Forensic Australian practice head Gary Gill. "A non-management employee of the victim organisation for six years, he has held his current position for four years by the time of detection.

"Typically motivated by greed and acting alone, he misappropriates cash to an average value of $262,000 over 11 months before being detected by the organisation's internal controls. Perhaps most alarmingly, his employer can expect to recover as little as 12 per cent of the proceeds of the fraud."

Almost half (45 per cent) of respondents experienced at least one fraud during the two-year survey period, while in almost a quarter of cases (22 per cent) organisations had ignored relevant warning signs.

Poor internal controls remained the main factor allowing fraud to occur, and was identified as the most important pre-condition for 26 per cent of reported frauds.

"Conversely, internal control is the most common method by which respondents detected their largest fraud, covering 42 per cent of detected cases," Gill said. "Defrauded organisations most likely did little to prevent the fraud occurring and, in fact, probably missed a number of warning signs before eventually uncovering the fraud.

"An effective, business-driven approach to fraud risk management combines prevention, detection and response."

Gill said the typical fraudster was likely to be reported to the police (63 per cent) and almost as likely to be immediately dismissed (45 per cent).

Reasons cited by organisations for not reporting matters to the police included the relative insignificance of the matter (28 per cent), followed by lack of evidence (19 per cent) and return of money/property taken (15 per cent).

- Mark Phillips