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Businesses need to be on their guard

Member: Nifa

A recent report by Action Fraud, the UK’s national fraud and cybercrime reporting centre, has found that one in five businesses has been defrauded by an employee, although this figure is thought to be the tip of the iceberg. Worryingly, this risk increases during periods of instability or economic downturn, so business owners need to be on their guard at the moment and have the number of a forensic accountant ready in case any suspicious activity needs investigation.

As Action Aid points out, the emotional reaction when faced with the idea that a trusted employee could be defrauding the business is to sack them but this is not the best way forward. For one thing, engaging forensic accountants will give the owner an idea of the magnitude of the loss and, if there is still money in the perpetrator’s account, the business might be able to get some of it back.

Forensic accountants look at the company’s ‘books’ and bank accounts, tracking the movement of money and the frequency of transactions. Using sophisticated software, they can spot the smallest anomaly, meaning that anyone from the employee in payroll who is siphoning off the odd penny from each employee’s pay into his own account to the accountant who is falsifying invoices, will be found out. 

They will then look at the alleged perpetrator’s lifestyle to see whether his outgoings match his salary and will interview his colleagues and follow email and text message trails to see whether he is giving himself away ‘in print’. Finally, should there be enough evidence for this person to be charged with an offence, these experts are able to testify in court as expert witnesses.

Author: Roger Isaacs, 22 August 2016


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