WorldCom has fallen victim to the most significant fraud scandal since Enron after it admitted it orchestrated a multi-billion dollar accounting fraud.
This comes just a week after SAS revised its estimated cost of fraud in the UK up from £14bn to £18bn per annum in light of such high publicity cases as Enron and Allied Irish Bank.
Peter Dorrington, head of fraud at SAS, said: ‘As global economies slow down, the pressure on businesses whose financial position may already be weakened by fraud becomes intolerable and the fraud inevitably comes to light.
‘If the slow down occurs in the UK economy, as many sources are predicting then I believe existing frauds in the UK will be uncovered on a similar scale to WorldCom.’
SAS’s comments support those of FSA chairman Howard Davies, who recently admitted an Enron type fiasco was possible in the UK.
They were also echoed by Prem Sikka, professor of accounting at the University of Essex who told the BBC: ‘We will see a lot more Enrons and Worldcoms, including in the UK.’
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements