MNP survey reveals critical gaps in fraud awareness among Quebec businesses
MNP survey reveals critical gaps in fraud awareness among Quebec businesses
New findings highlight alarming disconnect between perceived and actual fraud risks. This underscores the need for proactive measures among Quebec businesses and a new mindset on the eve of a potential tariff conflict with the United States.
MONTREAL, QC - February 17, 2025 - The latest survey by MNP’s Forensics 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 was conducted by Callosum on behalf of national professional services firm MNP. The survey interviewed 256 owners or senior executives of businesses in Quebec, representing all types of industries across the province.
Survey results show that while one in three businesses will experience fraud during its lifetime — three times on average for impacted businesses — 78 percent of businesses still perceive financial fraud risks as low to moderate. More than 40 percent of respondents acknowledge heightened fraud risks due to economic pressures like inflation and rising interest rates. However, fraud remains among the least important concerns for Quebec executives, managers, and business 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 Bloom, leader of MNP’s Forensics and Litigation Support Services team in Eastern Canada. "Fraudsters are particularly active in times of upheaval, such as the present. We are currently experiencing economic changes, work structure changes, and complex and rapid technological advancements. This heightens fraudster activity, leaving companies more vulnerable and at risk of not properly responding to financial threats. The rise is alarming: 33 percent 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. Survey results also suggest businesses 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 percent of businesses implementing whistleblower systems. Moreover, 25 percent 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. Many Quebec companies could see their profitability affected with potential U.S. tariffs imposed on Canadian imports, increasing the pressure on their financial operations. Quebec households are already struggling with inflation and rising interest rates — and will also suffer repercussions if Canadian tariffs are imposed in response. These factors add further incentives for fraud,” adds Simon Gaudreau, Senior Manager of MNP’s Forensics and Litigation Support Services team in Montreal. “Executives frequently focus on high-profile risks like cyber security 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 defenses to protect themselves effectively.”
Other major highlights from the MNP survey:
- Staff recruitment and labour shortages 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 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 was rated as one of the lowest perceived risks, despite being the second most prevalent fraud scheme impacting Quebec businesses.
- Most respondents believe their risk of fraud is equal to their competitors, but three times as many think they are at lower risk rather than higher risk. 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 occurrences in 2021 to an average of three 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, such as segregation of duties and pre-employment checks, have declined in use, increasing the risk of fraud.
- Solutions: MNP recommends proactive measures, including regular fraud risk assessments, whistleblower hotlines or reporting mechanisms, ongoing employee training, and collaboration with external anti-fraud professionals to mitigate vulnerabilities and improve resilience.
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National in scope and local in focus, MNP provides client-focused accounting, consulting, tax, and digital services in more than 150 communities from coast to coast. Founded in Brandon, Manitoba in 1958, we are proud to be born and raised in Canada and committed to the success of Canadian individuals, businesses, and organizations. Our advisors deliver personalized strategies and made-in-Canada solutions to help you reach your full potential — wherever business takes you.
To learn more about the results of this survey, please contact:
Corey Bloom FCPA, CPA•IFA, CFF, CFE, ACFE Regent Emeritus
Partner, Eastern Canada Leader (Quebec, NCR and Atlantic Canada), Forensics, Investigations and Disputes
Corey Anne is a Partner and Eastern Canada Leader (Québec, NCR and Atlantic Canada) with MNP’s Forensics and Litigation Support (Investigations and Disputes) Services team in Montréal. An expert in forensic accounting, investigations, digital forensics, anti-money laundering and white-collar crime, Corey Anne works closely with both public and private sector clients in a wide range of industries. She specializes in fraud detection, investigations and risk assessment; forensic accounting; dispute resolution; workplace forensics; shareholder and multi-party disputes, including estates; fund tracing, risk management; anti-money laundering; forensic technology; and litigation support and auditing. She also provides forensic accounting and anti-fraud training.
Corey Anne is a Regent Emeritus and a past Chair of the Board of Regents of the Association of Certified Fraud Examiners (ACFE). An international speaker, she is a recipient of the Governor General’s Award of Excellence. Corey Anne is a Chartered Professional Accountant (CPA) and has received the title of Fellow (FCPA) from the CPA Order, the highest distinction awarded by the Order. She is a CPA-designated specialist in Investigative and Forensic Accounting (CPA•IFA), Certified in Financial Forensics (CFF), a Certified Fraud Examiner (CFE), Certified User of forensic software (International), and a Regent Emeritus with the Association of Certified Fraud Examiners (ACFE).
Corey Anne holds Federal Secret Level Security Clearance. She is a past board member, past audit and finance committee chair, and a past member of Telefilm Canada’s strategic planning committee. She is currently a member of the Québec CPA Order Arbitration Committee. Corey Anne is fluently bilingual in English and French.