Scary truth about the increase in fraud
Open any page in a national newspaper at the moment and the stories on fraud are unmissable
The credit crunch means we can look forward to an avalanche of fraud as
employees and company directors seek ways to boost pay and income, or make the
company result look better.
BDO Stoy Hayward (see opinion opposite) says there is a dramatic rise in
reported corporate fraud, while at the same time a debate about the exact nature
of the Serious Fraud Office is being played out in the national press.
The implications of all of this are scary. While we work out exactly how we
should tackle fraud it seems that it is taking place in unprecedented volumes.
It is of course true that the fraud investigators in accountancy firms have
an interest in a heightened fear of fraud (though anecdotally we understand that
the fraud teams are snowed under with work).
But what we should guard against is turning the workplace into an environment
driven by paranoia. There is no quicker way in the world of alienating a
workforce than placing them under suspicion. What companies need right now are
committed team players to help carry them through this difficult time, not
people who feel they are under Big Brother surveillance. This requires companies
to exhibit a degree of proportion and judgement. And one way of achieving this
is through engagement with staff rather than alienation. Help them understand
the implications to the business and them.
Meanwhile, the SFO needs to settle its agenda swiftly and soothe all the
concerns in the market about its purpose.
Without doing that it cannot be an effective deterrent to large scale
corporate fraud.
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