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Fraud in the workplace

Fraud in the workplace continues to be a significant threat to UK businesses, causing annual reported losses of over £1.5 billion. Large organisations dismiss in the region of 100 to 150 members of staff every year for fraudulent activity and many have seen double digit increases in the number of staff fraud referrals in recent years.

By their nature, many workplace frauds usually involve finance people, often in senior positions of influence, either working alone or in collusion with others.

Awareness and vigilance is key. Look out for staff “Red Flags” such as:

  • Are they the first in and last out of the office?
  • Do they come in at weekends?
  • Are they protective of their work?
  • Do they work in isolation?
  • Are they living beyond their means (cars, properties, holidays)?
  • Has there been a material change in their personal life?

At the heart of any fraud mitigation process are robust financial and non financial systems and controls, and the development of an anti fraud culture within the organisation. Examples of best practice include:

  • Rigorous vetting procedures for new staff, particularly those in senior positions and with controls over financial functions
  • Segregation of duties and rotation of staff in key financial roles
  • Enhanced management reporting designed to identify unusual or suspicious activity
  • Documented and communicated whistle blowing outlets for employees
  • A continuous programme of anti fraud training

In SME’s there is often informality and a trust culture which can leave such businesses wide open to frauds. Raising awareness of the risk of fraud in the workplace, creating a culture of healthy scepticism and embedding prevention processes into day to day procedures can significantly reduce this risk.

© SA LAW 2017

Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them alone. You are recommended to obtain specific advice in respect of individual cases.