Finance directors need to ensure their internal controls and risk management systems are robust as experts predict the level of corporate fraud will escalate as the economy worsens.

Last year, company managers, employees and customers were tried in UK courts for £300m worth of fraud, three times more than in 2007, according to Big Four firm KPMG.

Professional gangs accounted for £800m worth of fraud court cases, taking the total fraud value to £1.1bn, the second highest level in 21 years.

KPMG warns the worst is yet o come. It says the bulk of the fraud committed since the credit crunch began in August 2007 will not yet have come into the public courts.

‘As the global economic downturn takes hold and organisations look ever more closely at their operations it is very likely that more fraud will come to light so that the real impact of the credit crunch on fraud is yet to be fully felt,’ said Hitesh Patel, fraud investigation partner at KPMG Forensic.

The gloomy prediction underscores the need for finance directors to check their company’s safeguards against fraud.

The report says companies need to be rigorous about re-enforcing anti-fraud measures, including reviewing high risk and key operations, having effective reporting channels and deploying detection mechanisms such as data analytics.

FDs can also get advice on combating fraud by looking at the Turnbull guidance on corporate governance, which is published by the Financial Reporting Council.

Roger Barker, head of corporate governance at the Institute of Directors, said the banking and financial services industries may be more susceptible to fraud due to the scale and often opaque business lines operating within these organisations.

‘This type of thing tends to emerge in a downturn and when companies are running into difficulty; they want to stem the tide and there’s a temptation to cut corners and put off the need to take a hard look at the problem,’ he said.