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Job cutbacks 'lead to corporate fraud'

Published on 2 Feb 2010 under category: legal

Cutbacks during the recession may have left companies more vulnerable to fraud, according to a new report.

PricewaterhouseCoopers LLP found in its 2009 Global Economic Crime Survey that the most thriving areas of fraud were public sector finances, green fraud and cyber-crime.

The increase in criminal activity was attributed to the cutting back of internal audit activities and less scrutiny around signing off business.

Tony Parton, partner, PricewaterhouseCoopers LLP, said: "Reduced investment in compliance and checking processes makes it easier for fraudsters, both inside and outside organisations, to exploit weaknesses and opportunities.

"The result for the company can be reputational damage and stiff fines."
In addition to this, workers may be more tempted to commit fraud because they want to maintain living standards from prior to the recession.

Ironically, employees were also likely to commit fraud and manipulate figures through fear of losing their jobs, given the economic downturn.

Public sector finances are likely to bear the brunt of white-collar crime this year because of reductions in staffing only coming into force now, the report claims.

Green fraud is a growing area, because of the lack of specialist understanding over offsetting schemes and the costs and values of energy efficiency measures.

If you require advice on Corporate Fraud please call us on +44 (0)207 831 0101 and ask for Dan Hyde.