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Forensic accountants and food fraud

Member: Nifa

The Danes have been employing forensic accountants to investigate food fraud for years, under the premise that a fraudster will always leave evidence in the books. To that end, in 2006, they set up the Danish Food Flying Squad, which includes inspectors with forensic accounting skills.

According to the Danish Veterinary and Food Administration department, it is impossible to defraud a firm without leaving evidence, so they need people who are trained to find it. This could be a clue like a suspect requisition, a mismatch between invoice and order or an unusual payment pattern. Whatever it is, the forensic accountant will almost certainly spot it by using years of experience and sophisticated software.

Now the UK is following their example, after Professor Lisa Jack, Professor of Accounting at Portsmouth University, has been promoting the Danish method across the country. Since the 2013 horsemeat scandal, Professor Jack, who contributed to the Elliott Review into food crime prevention, has been preaching to the food industry about the benefits of forensic accounting.

Initially the industry was sceptical but the advice seems to have filtered through at last and earlier this year a new qualification was launched called Accredited Counter Fraud Technician. This aims to give employees the skills to recognise the ‘red flags’ that are always present when a food company is under attack from fraud.

If a firm suspects that it is being scammed, the managers should bring in a forensic accountant, who can pick up on the leads identified by the qualified employee. He or she will then continue to investigate in such a way as not to contaminate evidence in preparation for a prosecution. 

Author: Roger Isaacs, 6 July 2015

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