PracticeConsultingPractice – Worst fraud is ‘enemy within’

Practice - Worst fraud is 'enemy within'

Companies around the world are losing billions of pounds due to fraud perpetrated by their own staff.

An Ernst & Young survey published this week reveals a global problem with ?the enemy within?. The survey found 84% of the worst frauds were committed by company employees.

Shocking statistics showed one company lost in excess of #350m to fraud and more than 30% of respondents believed they had suffered more than five frauds in the last five years.

David Sherwin, partner in charge of E&Y?s fraud investigation group, said: ?Companies need to institute proper prevention and reporting policies and ensure directors understand their core business and overseas operations.?

There was a direct correlation in the survey between the directors? understanding of their business as a whole and the incidence of fraud. There was a particular problem in IT, an area in which 75% of respondents felt their directors were lacking in understanding.

Sarah Evans, also a partner in E&Y?s fraud investigation group, said: ?You need an anti-fraud culture and transparency. The whistle-blower legislation should help. But every accountant can help by encouraging the client to think more carefully about areas such as procurement and cash-handling.?

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