Fraud – CBI to investigate business losses

The Confederation of British Industry is set to launch a survey to measure the prevalence of fraud in British industry.

The fresh inquiry comes as the deadline for responses to the Auditing Practices Board consultation paper, ‘Fraud and Audit: The Choices for Society’ nears.

A CBI spokesman said: ‘We would support any provision to curb fraud.’

In its response to the APB report, ACCA said external auditors should be the last line of defence, with more emphasis on strengthening internal controls and more severe sanctions against directors who abuse their positions.

ACCA said the current balance needed to be redressed, particularly in terms of how fraud is reported in both owner-managed businesses and larger organisations.

Using its response to highlight the need for guidance to auditors working with smaller businesses, ACCA stressed the need for larger entities to give their internal audit function adequate resources and independence.

The association’s senior technical officer Mary-Louise Wedderburn said: ‘In the UK, the APB tends to set high level principles but not tell people how to do things, while the US has developed a more prescriptive approach and we think there needs to be a more formal assessment of risk.’

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