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Low level fraud increasing

Member: Nifa

New research has found that, while the total value of reported fraud cases fell to its lowest level in more than a decade last year, the volume of cases has risen to its highest level with lower level crime on the increase. However, the incidence of fraud may be even higher than the numbers suggest, as many firms are pursuing high-value complex fraud outside the judicial system.

According to the report, the total value of fraud last year was £720m, down 31 per cent on the previous year and the lowest value since 2003. However, the actual number of cases in 2014 rose to a record 546, up from 525 the year before, with the average value of fraud falling from £3.3m in 2012, to £2m in 2013 and £1.3m in 2014.

Of the cases last year, 402 had a value of £500,000 or less, making up almost three-quarters of fraud by volume but only 9 per cent by value and they were largely unsophisticated attempts at fraudulent activity.  The report concluded by saying that a large number of high-value complex fraud is being dealt with without going to court in a bid for firms to maintain their reputations. This has led to many of them dealing with cases in-house and through alternative remedies.

One such remedy is the use of forensic accountants who can advise on the best ways to manage systems to provide sound internal controls and carry out investigations away from the public gaze (if reputational issues are important to the firm).

Author: Roger Isaacs, 23 February 2015

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