NIFA NEWS

Losses from corporate employee fraud have doubled in the last year

Businesses have reported £88 million in losses in the last year due to corporate employee fraud, according to data obtained from ActionFraud.

These figures have doubled in the last year, from £40 million reportedly lost in 2016-2017.

Corporate employee fraud includes attempts by employees or ex-employees to obtain remuneration through fraud or to steal money through the misuse of corporate cards and expenses.

Some commit fraud by submitting bogus business expense claims for personal expenses or claiming overtime for time that was not worked.

In total, businesses reported employee fraud more than 1,418 times; an increase of 76 per cent since 2016.

The average loss from each report in the last year has exceeded £62,000, but the figures are almost certainly understated because many frauds are undiscovered or, even if they are uncovered, remain unreported.

It is predicted that with the number of incidences increasing, businesses will start to be more alert and will start to put in place tighter internal controls.

Businesses have been called upon to encourage whistle-blowers to report any suspicions of their colleagues’ fraudulent behaviour.

If fraud is suspected, forensic accountants can examine a company’s ‘books’ and bank accounts, tracking the movement of money and the frequency of transactions.

Using sophisticated software, they can sometimes 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 director who is falsifying invoices on a grand scale, will be at risk of being found out.

Finally, if there is 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 27 September 2018

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