On the money

You may be completely innocent, but an investigation by the straight-faced
chaps of the SFO will still have the power to make you feel uncomfortable.

The latest SFO probe comes at Torex, suppliers of retail software, where the
chief executive has had to step aside, though remaining on the board. While
there’s no conclusion that there has been fraud at Torex, the experience will be
unpleasant all the same.

But the fact remains that a fraud investigation, according to reports
produced for government, is quite rare. That’s because experts cannot put a
value on the total amount of fraud because they believe it is massively
underreported.

People just don’t run around telling the police that much. They find it, have
their suspicions, and either sack someone on the quiet, or discreetly shut down
the means by which it is committed.

It’s a bit embarrassing, you see, to have the whole world know that your
security systems weren’t up to it, or that some of your people couldn’t be
trusted.

Add to that the fact police forces are woefully under-resourced with fraud
officers. If it’s not big enough, they just won’t bother. Here are the facts of
financial crime. Most of it is undetected or unreported and people only tend to
get caught when they become greedy.

There’s a distinct possibility that the message in all of this is that if
your fraud is modest, you won’t get caught, and even if you are, the worst that
could happen is you’ll lose your job. Unpleasant, but not intolerable.

Surely, as Ros Wright, the former SFO chief, has written in the past, fraud
needs to be a much bigger priority. Over to you Gordon and you John Reid.

Gavin Hinks is the editor of Accountancy Age