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Are accountants unearthing more fraud?

Are accountants unearthing more fraud?

According to recently published data from KPMG, total fraud in the UK reached an all time high of £3.5 billion last year.

In the final six months of 2011, around £2.5 billion worth of fraud was unearthed. Included in that total were five cases of fraud, worth in excess of £50 million each, which have since come to court.

Forensic partner Hitesh Patel from KPMG said economic uncertainty had fuelled the increase in fraud. Government agencies and businesses have been rooting out more cases of fraud through operational changes and austerity measures, but the economic downturn has added financial pressure on employees and acted as a catalyst towards more fraud.

The public sector suffered from 68 fraud cases valued at £1.09 billion, whilst financial companies had fewer cases at 59, but these were worth £1.52 billion. Of the latter, professional criminals committed the majority of the fraud, but customers and company insiders also contributed to the numbers, KPMG discovered.

In fact KPMG found that professional criminals were responsible for a total of 98 cases of fraud worth a total of £1.4 billion. Many of these were committed online, such as phishing attacks and bank fraud.

57 cases of fraud, totalling £729 million, were committed by management, an increase of 74% from 2010. In one case, a hedge fund owner was accused on over-inflating assets after some fraudulent transactions collapsed.

Patel stressed that organisations must make sure they have robust fraud prevention mechanisms in place so that they do not lose the money they have worked so hard to make.

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