INTHEBLACK April/May 2024 - Magazine - Page 24
F E AT U R E
Payroll fraud occurs when a
payroll system or its processes are
manipulated for financial gain and is
typically committed by employees.
The practice can range from small
infractions to large-scale fraud that
costs companies millions of dollars
and is a danger for any organisation.
It is important to be aware of the
possibility for payroll fraud and to
take robust measures to detect
and prevent it.
Spotlight on
payroll fraud
Businesses lose hundreds of millions of dollars each year because
of payroll fraud committed by their employees. Taking measures to
address payroll fraud and ensure employees with access to payroll
systems are above suspicion is crucial.
Words Gary Anders
At its zenith in 2008, the publicly
listed Australian computer and electrical
goods retailer Clive Peeters operated
a national chain of 48 stores, had an
annual turnover of over A$600 million
and employed more than 1000 people.
In 2010, Clive Peeters collapsed,
unable to cover the repayments on its
A$160 million in debts. A key reason
for this was internal fraud.
It was discovered through an external
audit that the payroll manager, a former
senior accountant, had embezzled more
24 INTHEBLACK April/May 2024
than A$19 million from the company over
a two-year period.
Clive Peeters is among the largest examples
of payroll fraud committed in Australia to
date – not to be confused with the more
recent A$105.6 million PAYG and GST
tax siphoning scam at payroll operator
Plutus Payroll Australia.
The total value of the Clive Peeters fraud
pales in significance compared with the
hundreds of millions of dollars that businesses
lose every year because of fraudulent activities
mostly committed by their employees.
