SMEs warned to control the cost of fraud
A new book, published by the Fraud Advisory Panel, with the backing of the ICAEW, says SMEs should be actively trying to control the costs of fraud to their businesses.
According to its author, Andrew Higson, a lecturer in accounting at Loughborough University, most frauds in small and medium-sized businesses are for ‘relatively small amounts and are therefore difficult to detect’.
For this reason, ‘management should be actively trying to control them’, rather than abdicate responsibility.
He encourages firms to think about the threat of fraud before it happens to them and to examine the mistakes of others.
Higson, in his book entitled ‘Indications of Fraud in SMEs’, said instances of fraud comes from three broad sources: employees abusing their position, supplier taking advantage of customers and business taking on customers they should rather avoid.
Furthermore, the book also examines the types of work cultures that foster fraud and how they are discovered.
The book has the backing of the government, with small business minister Nigel Griffiths calling it an ‘invaluable to help small firms ‘fraud proof’ their business’.