PricewaterhouseCoopers LLP is warning its clients and the wider business community to prepare for the increase in workplace crime and fraud that will accompany the UK recession.
Andrew Gordon, partner, PricewaterhouseCoopers LLP said: “In the current economic climate, the pressure on people to commit fraud at work is growing. Sales targets seem evermore out of reach, bonuses are under threat and people’s reputations and livelihoods are at stake. Together these can be powerful motives for individuals to cross the line.
“More fraud will be uncovered as the economic tide continues to ebb and companies pay closer attention to costs and cash flow.”
PricewaterhouseCoopers predict the following:
*The collapse of more fraudulent investment or ‘Ponzi’ schemes;
*High profile prosecutions by the Serious Fraud Office;
*Spiralling costs of employee fraud and theft;
*Increased data theft by a criminal organisations – the public sector is particularly vulnerable;
*Rogue traders – not just in banks but within the treasury function of other organisations;
*Falsified qualifications and experience being cited in job applications. There is with increased risk that these will go undetected as back office headcount is reduced resulting in weakened monitoring; and
*Deliberate misrepresentation of non-financial data – eg subscriber numbers to woo investors or advertisers or carbon emission trading figures
Around half of UK companies have suffered financial crime* and the average total costs to victim firms is in excess of £2 million.
John Tracey, partner, PricewaterhouseCoopers LLP, said: “Fraud covers a huge range of business activities and combating it needs a coordinated approach involving risk assessment, control, monitoring and communication. Most companies will need to put new processes in place and update their existing ones.
“Setting the tone from the top is important as is checking out potential business partners, screening new employees and establishing a reliable whistle blowing policy.”
* Source: PricewaterhouseCoopers Global Economic Crime Survey 2007
