Business advisers are warning against a dramatic increase in frauds resulting from the forecast downturn in the economy
Accountancy Age, 14 Jan 2008
BDO Stoy Hayward in its annual report on fraud, is warning against ‘an explosion’ of corporate fraud in 2008, particularly service industries such as IT, as managers desperate to keep their jobs manipulate the books.
Simon Bevan, BDO head of fraud services, said fraud was more likely to be discovered in a downturn when accounts came under closer scrutiny. In 2007, 267 cases of business fraud were reported in 2007, worth more than £50,000, with a total value of just above £1bn.
Alex Plavsic, the head of fraud investigations at KPMG, told Financial Times that, if the current credit crunch did lead to a slowdown in 2008, some high-value frauds in its wake could be expected.
KPMG said fraudsters were more likely to come from outside the organisation they were defrauding. Over the past four years, employees and managers had carried out the same number of frauds as outsiders but managers’ frauds at 48 were worth £346m as opposed to the 54 frauds by employees, valued of just £37m.
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