Forward Thinking Business Blog –
All businesses are vulnerable to fraud. While online and email-enabled frauds are the ones we hear most about these days, internal fraud is arguably a more serious business issue because it affects every business at some stage.
Losses from the misappropriation of company assets, theft of company data, payroll and procurement fraud can all go unnoticed where there are weaknesses in an organisation’s internal control systems.
Our PKF colleagues, PKF Littlejohn, in their Annual Fraud Indicator 2016 provide an insight into procurement fraud. This type of fraud is estimated to cost £127 billion in the UK.
“The procurement of goods and services often accounts for a significant slice of an organisation’s expenditure and is open to a wide range of potential risks of fraud. This is because there are usually multiple individuals involved in a process who often do not work closely together, i.e. the person who wants something purchased does not always work directly with the people who initiate orders and with those responsible for paying.”
Payroll fraud can also prove costly. This type of fraud arises where for example fictitious employees are included on the payroll or unauthorised hours billed. Losses from payroll fraud were an estimated £12 billion in the UK, PKF Littlejohn reported.