Tackling workplace fraud must be embedded in culture

UK Attorney General Jeremy Wright has suggested additional measures to address corporate crime. Picture: John Stillwell/PA Wire
UK Attorney General Jeremy Wright has suggested additional measures to address corporate crime. Picture: John Stillwell/PA Wire
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It was reported recently that British company bosses could face prosecution if they fail to prevent their staff from committing fraud within the workplace.

The UK Attorney General, Jeremy Wright QC, made the comments at a speech in Cambridge, addressing the question “where does the buck stop?” when it comes to corporate crime. He suggested that extending measures to address corporate crime would be part of a wider government consultation aimed at extending tax evasion laws.

While even the best designed measures cannot always prevent fraud, bosses can take actions now to reduce risk

Gillian Callaghan

These proposals follow the aftermath of the Libor rigging scandal where some individuals were convicted, but a lack of sufficient powers meant no further actions could be taken against the institutions involved.

READ MORE: Fraud probes bogged down in paperwork – Nick Leeson

If these latest proposals are to be taken forward the government must introduce them on a measured basis so they don’t have an adverse financial impact – especially on SMEs that may not always have sufficient resources to put adequate controls in place. While even the best designed measures cannot always prevent fraud, if there is a strong will and collusion between dishonest individuals, company bosses can take actions now to reduce risk. This process starts with a fraud risk assessment identifying areas where their organisation is exposed.

The development or review of a strong governance framework, led by the highest level within a company, should then follow with the implementation of an effective fraud policy and anti-fraud response plan. This requires a cohesive approach covering policies on whistleblowing, anti-bribery and money laundering with documented controls in place across all operations. Adopting a serious attitude to corporate fraud does not end with procedures and policies. It must be embedded into a company’s culture and supported by ongoing governance with regular board-level reviews and with external assurances from its auditors or another independent review body.

Regardless of whether or not Jeremy Wright’s more stringent measures ever come into place, there are many effective actions which can and should be taken now to ensure company bosses have reduced the risk of fraud from happening in the workplace.

• Gillian Callaghan is a senior manager and fraud specialist at accountant Chiene + Tait

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