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.

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