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Fraud on the increase

Member: Nifa

Recent research has found that the UK is a “major centre of excellence” as far as forensic accounting is concerned, with a number of individuals being nominated for awards in a strong international competition. This is reassuring, as new figures suggest that five million frauds occur every year in England and Wales and last year the crime was included in the official Crime Survey of England and Wales for the first time.

In the 12 months ending in March 2015, 230,630 fraud offences were recorded, an increase of 9 per cent on the previous year. Meanwhile a further 389,718 such offences were reported by industry bodies, an increase of 17 per cent on 2014.

When fraud occurs, the best thing a business can do is call in a forensic accountant, as this area of activity tends to be their primary work. When fraud is suspected or uncovered, the accountant will usually conduct a detailed analysis of the accounts to check that the numbers reflect reality. If they have been called in because they suspect theft, they will trace all the transaction on the books to establish when funds were removed, when and by whom. They will then check the accounts of the person or people suspected, if the accusation is out in the open.

They might also carry out interviews on behalf of the business owners and would prepare a report for them, including suggestions on developing a system to prevent further fraudulent activity, if any is uncovered or if they spot weaknesses in the financial system.

Fraudsters can be very clever but experienced forensic accountants have seen it all and will not miss any sign of wrongdoing, no matter how small.

Author: Roger Isaacs, 1 March 2016

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