Wellington, Aug 24 NZPA - Managers have been identified as the biggest risk to business in a "fraud barometer" survey by KPMG.

Internal staff members were responsible for 30 percent of all fraud cases in the 18 months to June.

The study was carried out in this country for the first time, with fraudulent activity needing to exceed $100,000, and the individuals involved at least charged or sentenced, for the case to be included in the survey, KPMG said.

In the six months to June, 28 large frauds were reported as being before the courts in New Zealand, with the amount defrauded exceeding $20 million. In 2008 there was more than $20m worth of fraud in each half of the year.

The most common target for successful large frauds was commercial business, with 26 frauds, or 29 percent, coming to court since early 2008, KPMG said.

A large majority of frauds suffered by commercial business related to internal staff -- employees, managers or directors -- manipulating accounting systems or deceiving their employer to divert funds to their own bank accounts.

"A slackening in oversight of internal controls by businesses during the economic boom of recent years is likely to have contributed to the success of staff perpetrating significant frauds," KPMG forensics partner Mark Leishman said.

Most commonly payroll or accounts payable functions were the most susceptible to accounting fraud, usually by the creation of fictitious payments.

Government bodies were the other major target for fraudsters in this country, accounting for more than 25 percent of frauds, KPMG said.

Most fraud against government related to tax-related fraud, but it was also a target for benefit fraud, grant and contract scams, or false accounting frauds by internal staff.

Financial institutions were also a regular target for fraudsters in New Zealand, having to deal with both internal and external fraud.

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