SMEs still ignoring fraud threat

Link: ICAEW: Interest rate rise threatens SMEs

A survey of 100 SMEs by top 50 chartered accountancy firm Morley and Scott found that only two thirds were concerned about the risk of fraud in their business.

Yet almost half admitted that they considered just a few of their employees honest.

Perhaps unsurprisingly then, one in three said they believed they were at a high risk of fraud. Of these 10% identified financial reporting as a potential risk area.

There was no agreed method for spotting the abuse. Over a third said their FD was responsible for identifying fraud; a quarter cited the board of directors; and 16% felt it was the MD’s job. Two thirds said checks were in place throughout their organisations.

Ten per cent will have extra motivation to reflect on their strategies: they have already suffered from fraud.

Morley and Scott is hoping to capitalize on the lack of consistency in SME’s approach with the launch of its Accounting Fraud Diagnostic Toolkit, web-based software that generates risk reports for companies.

Related reading