Comment – Arming the City against fraud

Speeches by Law Officers and Treasury ministers in recent months haven all sectors. The Fraud Advisory Panel’s approach is hoped to strike at the root, says Tony Bingham. shown government’s interest in combating fraud, because of the damage it can do to the City’s reputation and to wider business and the public.

Ian McCartney, Department of Trade and Industry minister responsible for corporate affairs, has now added his voice, welcoming the initiative of the ICAEW Audit Faculty in setting up the independent Fraud Advisory Panel.

The Panel, which is chaired by George Staple QC, former director of the Serious Fraud Office, consists of a wide range of individuals, many of them non-accountants but most of them representing organisations active in fraud prevention, detection, investigation and prosecution.

Its aim is to help reduce the incidence and impact of significant fraud, primarily affecting the business community.

Its multi-disciplinary, multi-sector approach – bringing together people from industry, commerce, the professions and government agencies – should produce a more co-ordinated approach to advising on fraud, with the emphasis on improved anti-fraud policies.

But it is not expected to fulfil an operational or implementation role.

Some people have asserted that because many frauds are perpetrated by accountants, or would have been detected earlier if accountants and auditors had done their job properly, the panel’s first recommendation should be that the accountancy profession puts its own house in order.

Whether the facts support such sweeping assertions is far from clear.

What is clear is that government, its agencies and regulators are concerned at the apparent increase in financial crime and expect the profession to redouble its efforts against it.

With the limited resources available the panel has decided to concentrate its initial efforts in three areas: gathering and evaluating information on fraud; advising business on improved fraud prevention, detection and reporting; and reviewing the effectiveness of existing investigation and prosecution methods.

Progress, and the influence the panel can achieve in these areas, will depend primarily on the time and energy of volunteers keen to contribute.

Accountants in all fields who want to help should write to Ruth Cooke, Audit Faculty, Chartered Accountants’ Hall, PO Box 433, Moorgate Place, London EC2P 2BJ or telephone 0171 920 8483.

Tony Bingham is a business assurance partner in Coopers & Lybrand and chairman of the Audit Faculty’s Fraud Working Party.

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