MNP Survey Reveals Critical Gaps in Fraud Awareness Among Quebec Businesses

New Findings Highlight Alarming Disconnect Between Perceived and Actual Fraud Risks, Underscoring the Need for Proactive Measures Among Quebec Businesses and a new mindset on the eve of a potential tariff conflict with the United States

MONTRÉAL, Feb. 17, 2025 /CNW/ - The latest survey by MNP's Forensics, Investigations and Litigation Support Services highlights troubling trends in fraud awareness and prevention among Quebec businesses. The findings underscore a concerning disconnect between perceived and actual fraud risks, emphasizing the need for more robust measures to combat financial fraud .

The survey, conducted on behalf of national professional services firm MNP, was done by Callosum among 256 business owners or senior executives of businesses in Quebec, representing all types of industries across the province.

Survey results show that while one in three (1 in 3) businesses will experience fraud during their lifetime − three times on average for impacted businesses − 78% of businesses still perceive financial fraud risks as low to moderate. Even if more than 40% of respondents acknowledge heightened fraud risks due to economic pressures like inflation and rising interest rates, fraud remains among the least important concerns for Quebec executives, managers and owners and many still lack adequate prevention strategies.

"It's concerning to see how fraud risk perception has remained almost unchanged since 2021, despite economic disruption and certain high-profile fraud cases," says Corey Anne Bloom, Partner and Eastern Canada Leader of Forensics, Investigations, and Litigation Support at MNP. "Fraudsters are particularly active in times of upheaval, such as the present. The changes we are currently experiencing, such as economic changes, work structure changes, complexity and rapid technological advancements, heighten fraudster activity, leaving companies more vulnerable and at risk of not properly responding to financial threats. The rise is alarming: 33% of businesses reported fraud incidents or believe they have been victims. Beyond financial losses, fraud erodes staff morale, compounding challenges for already struggling organizations."

Businesses admit they are not well prepared to deal with financial fraud. Responses indicate that businesses currently have fewer fraud detection measures and techniques in place than before and the survey suggests they may be deprioritizing fraud prevention, potentially due to economic pressures like inflation and rising costs. Despite tips being the most effective method for detecting fraud, fraud detection measures, such as tip lines and frequent anti-fraud training, are underutilized, with only 16% of businesses implementing whistleblower systems. Moreover, 25% of businesses never provide anti-fraud training to employees, and training efforts often exclude non-management staff.

"Unfortunately, increasing financial pressures are creating a dangerous incentive for fraud. With the potential of U.S. tariffs imposed on Canadian imports by the Trump administration, many Quebec companies could see their profitability affected, increasing the pressure on their financial operations. Quebec households won't be spared either, suffering repercussions if Canadian tariffs are imposed in response, but also through inflation and rising interest rates, adding further incentives to fraud," adds Simon Gaudreau, Senior Manager of Forensics, Investigations, and Litigation Support at MNP in Montréal. "While executives focus on high-profile risks like cybersecurity or theft of confidential information, this often creates blind spots for more specific threats such as payroll fraud, fraud in financial statements or less-publicized fraud schemes. Businesses must act now to address these neglected risks and close the gaps in their fraud defences to protect themselves effectively."

Other major highlights from the MNP survey:

• Staff recruitment and labour shortages (30%) are the top concerns for businesses, with two out of three respondents ranking it among their top three priorities. Financial or workplace fraud (4%), on the other hand, ranks second to last.
• Business owners were more likely to perceive fraud as a high risk but concerns about fraud risk drop when speaking to non-owner executives. Younger respondents also view financial fraud as a higher risk compared to older individuals.
• Theft of confidential information and intellectual property was again considered to be the highest perceived fraud risk, yet this type of fraud was cited as the fifth most prevalent type of fraud really impacting Quebec businesses. "Embezzlement," meanwhile, had one of the lowest perceived risks despite being the second prevalent fraud scheme impacting Quebec businesses.
• Most respondents believe their risk of fraud is equal to competitors, but three times as many think they are at lower risk (5%) rather than higher risk (16%). Similarly, most respondents believe that other lines of business face a comparable or higher risk of financial fraud as their own.
• Financial need (68%) seems to be the most common perceived motivation for committing financial fraud, followed by a lack of loyalty to the business (46%). Interestingly, owners are less likely than others within businesses to think financial need is the main motivation of employees committing fraud.
• The average number of financial frauds targeting victimized businesses increased from two (2) occurrences in 2021 to an average of three (3) occurrences in 2024.
• Billing (31%) and payroll (25%) fraud have become some of the most prevalent forms of financial fraud. Embezzlement (30%) also remains a major concern, continuing to impact a substantial number of businesses.
• Basic anti-fraud controls usage, such as segregation of duties and pre-employment checks, have declined, increasing the risk of fraud.
• Solution Ideas: MNP recommends proactive measures, including regular fraud risk assessments, whistleblower hotlines or reporting mechanisms, ongoing employee training and collaboration with external anti-fraud specialists to mitigate vulnerabilities and improve resilience.

The complete results of this survey can be found here: https://www.mnp.ca/en/-/media/files/mnp/pdf/service/forensics/perceptions-of-owners-and-senior-executives-of-quebec-businesses-regarding-the-risk-of-fraud.pdf 

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About MNP

National in scope and local in focus, MNP is one of Canada's leading professional services firms — proudly serving individuals, businesses, and organizations since 1958. Through the development of strong relationships, we provide client-focused accounting, consulting, tax, and digital services. Our clients benefit from personalized strategies with a local perspective to fuel success wherever business takes them. For more information, visit www.mnp.ca 

SOURCE MNP

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