Value of UK fraud increases dramatically

Online accountants will be aware that a lot of UK businesses are already weighed down with financial problems and now to add to their woes they also have to deal with an increase in fraud.

UK fraud reached £1.1 billion in the first half of this year, according to the latest survey from KPMG. This is a huge rise from the £609 million seen in the comparable period last year.

Hitesh Patel, a forensic accountant partner at KPMG, said UK fraud figures have been swollen by the evolution of e-commerce and our increasing reliance on automated payment systems.

Smaller businesses are more likely to suffer severely as a result of fraud as it impacts cash flow, which can lead to redundancies and in the worst cases, the firm will be forced to close down.

Patel cited an example of an in-house accountant who brought a business in the Wirral to its knees by stealing nearly £170,000. The accountant bragged on the Internet about his lavish lifestyle and luxurious holidays whilst the business had to make several people redundant.

Fraud can have a long-lasting affect on a business; impacting on both its growth and its competitiveness. Customers and staff begin to lose confidence and the firm could damage its reputation.

Both private and public sector organisations are suffering at the hands of professional criminals who perpetrate fraud. However, employees from senior management down are also playing their part.

The government hopes to stamp out fraud and the introduction of the Bribery Act at the beginning of this month, and the proposed National Crime Agency, should go some way towards winning the battle. But businesses must also assess their vulnerabilities to prevent employees and professional criminals defrauding them.

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