UK Fraud Simple Say Fraudsters
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Lax financial controls make UK companies an easy target for fraudsters. Only half of the top 350 companies are taking extra anti-fraud measures. £14bn is the figure put on the cost of fraud by the government. The Association of Fraud Examiners in a new report claims the amount could be as high as £72bn. Research from Protiviti also centres on fraud. The findings found that companies left themselves open to fraud because of weak controls and audit procedures. The Protiviti research involved interviewing 16 convicted fraudsters. Amounts alleged to have been stolen by the interviewees range from £65,000 to £25m. Most of them did not set out to be big-time criminals but drifted into fraudulent activities when they saw how weak internal controls were. The biggest opportunity was the lack of any anti-fraud prevention strategies. Many of the perpetrators set up false companies to invoice the firm they actually worked for. Three factors had an impact on the amount of fraud in a company: organisational culture, degree of controls and internal audit efficiency. A damning indictment of the companies involved is that when the fraudsters were caught they were accused of taking inflated amounts. An indication probably that the victims had no idea how much had been taken. The government has launched a review of how the UK tackles fraud. The investigation centres on how to prevent fraud and bring white collar criminals to justice. Government departments, police, prosecutors and the private sector are all involved. The UK currently has no requirement for companies to test, evaluate or attest to the effectiveness of internal controls over financial reporting. The U.S. however has the infamous Sarbanes-Oxley Act of 2002.
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