Corporate internal fraud set to rise, PwC warns

Internal fraud within businesses in the run up to Christmas is likely to increase as the economic downturn encourages employees to ditch normal ethics, PricewaterhouseCoopers has warned.

PwC said there has been an increase in reports of fraud in companies in various industries. The internal fraud can range from misappropriation of assets and fiddling expenses to stealing sensitive customer data and misrepresenting performance figures to help achieve better bonus

'We know from previous recessions that internal fraud is more likely to surface as economic conditions tighten,' said Neal Ysart, forensic services at PwC. 'It is important that businesses take steps now to counteract any potential for incidents to arise.'

'It is not simply about someone taking the office sellotape to parcel Christmas gifts but can be as serious as employees massaging expenses, something that ocan have a real impact on cash flow.'

PwC urged companies to be clear about how they define internal fraud and introduce extra management controls for areas such as expenses and other expenditure.

Companies that cut jobs where staff can access valuable customer data should also consider additional monitoring controls and 'exit screening', PwC added.