PracticeAccounting Firms‘Lax audits’ lead to fraud

'Lax audits' lead to fraud

Business should be paying more to fight financial crime because much fraud comes about due to negligence and ineffective audit controls, one of the City's senior policemen has said.

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Supt Ken Farrow, head of the City of London Police fraud squad, points the finger of responsibility at businessmen who fail to take financial crime seriously.

Writing exclusively in Accountancy Age Supt Farrow said: ‘Fraud is still not taken seriously by senior managers who fail to recognise weak security or lax auditing procedures.’

He added: ‘In these circumstances why should police resources be diverted from protecting the public?’

Supt Farrow’s views will no doubt prove controversial and follow on from earlier claims that fraudsters are escaping prosecution because local police forces do not have the resources to pay for specialist accountants to help in the fight against financial crime.

Accountants too seem convinced that businesses must fund their own fraud investigations. Sean Holohan, a senior manager of fraud investigation at BDO Stay Haywood, said: ‘Think about it – you receive an allegation of fraud, it could be bona fide or it could be unfounded. Immediately calling the police ties up their resources and, possibly, leads them on a wild goose chase.’

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