US boardrooms braced for increase in accounting fraud

Nearly two thirds of US executives expects the rate of accounting fraud to increase in the economic crisis, according to a poll conducted by Deloitte.

Almost half of those questioned said their companies had put fresh measures in place to deal with investigations.

Kerry Francis, the head of Deloitte’s corporate investigations practice in the US, said: ‘While fraud is committed during strong economic conditions, it is clearly exacerbated in declining markets.

‘Smaller paycheques, reductions in employee headcount and internal controls, as well as diminished morale, are just a few factors that can open the door to fraud in a down market.’

The poll also revealed that almost 40% of executives believe increased fraud awareness training would help fraud prevention. Around one fifth thought prevention would be aided by ‘more robust’ fraud risk assessments and another fifth backed expanded internal audit monitoring.