The recent Fraudtrack analysis report shows that fraud in 2016 hit a five-year high, increasing 31.5 per cent to £2 billion. Whilst the volume of cases fell, the total cost of fraud rose 35.4 per cent to £3.9 million.
Geographically, London & South East are shown to be at the biggest risk of fraud, with 159 reported cases (31.6 per cent of all cases). This is followed by the North West with 14.5 per cent of all cases and the West Midlands with 10.5% of all cases.
Fraud against individuals accounted for 30.4 per cent of the reported cases of fraud, with the elderly and vulnerable remaining most at risk.
In terms of sectors, public administration reported the highest level of fraud (£1.4 billion of the UK total). This was followed by the finance and insurance sector. Whilst still high, fraud in the financial sector saw a fall in value by more than 61 per cent, as well as a significant drop in volume compared with 2015 figures. The arts, entertainment and recreation sector, health care and social assistance, and the wholesale trade sector were also in the top five industry sectors reporting the highest level of fraud.
According to the report, the top five most common types of fraud in 2016 include tax fraud, third party fraud, money laundering, employee fraud and mortgage fraud.
Effective management accounts and company audits
When putting processes in place for effective business administration, sound management accounts will enable better control of your financial situation and awareness of the business in real time. This can be effective not only in detecting and countering fraud, but also in enhancing planning for the peaks and troughs. In turn, whilst many companies do not need an audit due to rising thresholds, an audit can give comfort to business owners and act as a fraud deterrent.
At Beavis Morgan, we work with our clients to put processes in place which make it easier to run your business, reduce risk and maintain effective management of your company’s working capital.