3 Iteral cotrol systems ad fraud this chapter covers... This chapter starts where the last chapter fiished, by dealig with the exteral regulatios that affect accoutig practice. Some of these are required by legislatio ad affect areas such as taxatio, auditig ad the regulatio of limited compaies. Others are accoutig stadards set both i the UK ad iteratioally by idepedet accoutig stadards bodies. The mai part of this chapter explais the iteral cotrol systems that are set up i a orgaisatio to implemet all the requiremets of exteral regulatios ad other orgaisatioal requiremets. The chapter describes i detail: the differet types of fraud that ca be committed withi a orgaisatio the risk of fraud occurrig withi a orgaisatio the areas vulerable to fraud the eed to desig a system so that fraud is miimised, ca be easily detected ad dealt with as appropriate
i t e r a l c o t r o l s y s t e m s a d f r a u d 3 5 e x t e r a l r e g u l at i o s a f f e c t i g a c c o u t i g p r a c t i c e l e g i s l a t i o The term legislatio covers a wide rage of regulatios based o UK Acts of Parliamet ad Europea Directives. Orgaisatios are affected by a umber of legal regulatios affectig the way i which a accoutig system operates. Examples iclude: taxatio regulatios affectig areas such as: PAYE for idividuals o the payroll: icome tax, Natioal Isurace ad other deductios Value Added Tax: VAT returs, ivoice format, rates applied corporatio tax paid by limited compaies compay law set out i the Compaies Acts requires that compay fiacial statemets (of larger compaies) should be audited; these statemets are to be draw up i a set format ad set to shareholders; larger compaies also have to sed full versios of these statemets to Compaies House where they ca be accessed by the public data protectio law set out i the Data Protectio Act 1998 protects data (icludig fiacial data) relatig to idividual customers late paymet law set out i the Late Paymet of Commercial Debts Regulatios 2013 allows suppliers to charge iterest o late paymet of ivoices u K a d i t e r a t i o a l a c c o u t i g s t a d a r d s The Fiacial Reportig Coucil (FRC) is a uified, idepedet regulator which: sets, moitors ad eforces accoutig ad auditig stadards oversees the regulatory activities of the professioal accoutacy bodies regulates audit promotes high stadards of iteral regulatio withi compaies ( corporate goverace ) The membership of the Coucil icludes wide ad balaced represetatio at the highest levels from the busiess, ivestor, professioal ad other commuities iterested i corporate reportig ad goverace. The FRC promotes good fiacial reportig through its Committees ad Coucils, which iclude the Accoutig Coucil ad the Audit ad Assurace Coucil.
3 6 i t e r a l c o t r o l a d a c c o u t i g p r o j e c t The FRC takes a active role i relatio to the iteral regulatio of compaies, esurig that they comply with compay law, accoutig stadards, ad auditig stadards. Accoutig stadards have bee developed over may years ad are ow the resposibility of the Accoutig Coucil, a part of the FRC, to provide the rules, or framework, of accoutig. The itetio has bee to reduce the variety of alterative accoutig treatmets. This framework for accoutig is represeted i the UK by Statemets of Stadard Accoutig Practice (SSAPs) ad Fiacial Reportig Stadards (FRSs). As you will kow from your other studies, may compaies Europea (icludig UK plcs) ad worldwide ow prepare their fiacial statemets i accordace with Iteratioal Fiacial Reportig Stadards (IFRSs). It is aticipated that iteratioal fiacial reportig stadards will evetually replace the UK Stadards. Iteratioal Stadards o Auditig (ISAs) are also gradually beig itroduced; these will set dow guidelies for the way i which UK busiesses are audited. report writig hit Whe you write about the proposed chage to the accoutig system of your chose orgaisatio you will eed to provide evidece that it takes accout of ay chage i exteral factors such as chages i the law (eg compay regulatio, tax rates) ad chages i accoutig stadards. t h e e e d f o r p o l i c i e s a d p r o c e d u r e s Exteral regulatios such as legislatio are oly of ay use if a orgaisatio regulates its employees ad keeps them up-to-date by issuig formal iteral sets of rules ad guidelies. These are ofte referred to as Policies ad Procedures. w h a t d o p o l i c i e s a d p r o c e d u r e s c o v e r? Illustrated o the opposite page is a iteral documet issued by a large compay outliig the itroductio of ew Policies ad Procedures for the retetio ad disposal of records throughout the busiess. Records ca be paper-based or electroic. I this case, the documet produced by each fuctio i the busiess sales, admiistratio, accoutig ad fiace will set out:
i t e r a l c o t r o l s y s t e m s a d f r a u d 3 7 what records should be retaied ad at what level of security ie if they should be locked up or ot the period of time for which the records should be stored what records should be disposed of (ie shredded or wiped from a computer storage medium) I the case of the Accoutig ad Fiace fuctio, this could iclude: retetio of fiacial documets such as ivoices, bak statemets, payroll records ofte for six years safe disposal of these records after this period immediate safe disposal of cofidetial details such as credit card details from customers set i with mailed orders I this documet the eed for ew Policies ad Procedures is made clear: The compay is obliged uder iformatio legislatio to have retetio/disposal schedules for all its corporate records. Without clear retetio/disposal policies the compay risks fallig foul of the Data Protectio Act, Freedom of Iformatio Act, ad Public Record Act. record retetio ad disposal ew policies ad procedures Our Policies ad Procedures are the mai referece material for people i each Departmet. All formal procedures ad work systems are outlied i these documets which give maagers ad staff the rules ad guidelies. The compay is obliged uder iformatio legislatio to have retetio/disposal schedules for all its corporate records. Without clear retetio/disposal policies the compay risks fallig foul of the Data Protectio Act, Freedom of Iformatio Act, ad Public Record Act. Failure to dispose of records i a timely ad efficiet maer ca lead to criticism from the Iformatio Commissioer ad Adjudicator. Curretly, iformatio relatig to how log we should be keepig records is scattered throughout operatioal guidace. Quite ofte this retetio/disposal iformatio is out-of-date ad/or the reasos behid why particular time periods were chose have bee forgotte. The people makig decisios regardig retetio/disposal timescales eed to uderstad the differet reasos that may effect their decisio. These ew Policies ad Procedures: lay dow the compay policy for documetig retetio iformatio explai why a retetio policy is eeded idetify umerous reasos that ca effect the retetio period decisio, ad cotai a good practice guide o how to costruct a retetio schedule
3 8 i t e r a l c o t r o l a d a c c o u t i g p r o j e c t i t e r a l c o t r o l i a a c c o u t i g s y s t e m Ay accoutig system will have certai elemets i commo, whether it is a compay Accouts Departmet, a Local Authority Purchasig Departmet or a charitable orgaisatio s fudraisig sectio. It will: deal with moey hadlig cash eed to make paymets ad issue cheques have levels of authority withi the system eed to make decisios over orderig ad purchasig eed to set budgets for spedig eed to orgaise its accoutig records Uless the maagemet is happy to let everythig become totally disorgaised, the accoutig system will eed to establish various rules ad regulatios which will establish a iteral cotrol system, for example: the establishig of moey limits for certai trasactios the defiitio of levels of resposibility for authorisig trasactios the eed for referral of decisio makig to aother perso whe required Illustrated o the opposite page are extracts from a Policies ad Procedures iteral cotrol documet issued by the Accouts ad Fiace Departmet of a medium-sized busiess. Read through this ad you will see that there are a umber of examples of the three areas of iteral cotrol outlied above. These have bee extracted ad are show below. moey limits All orders of 1,000 or more must be authorised by the budget holder. All cheques for 1,000 or over require two sigatories. Petty cash will be topped up o the 'imprest' system, where the amout spet is reimbursed. It is iteded for small items, up to 20. authorisatio All ivoices must be authorised for paymet by the budget holder. Salary paymets require the sigature of the Accouts Maager or Fiacial Cotroller, plus oe other. referral to aother perso or higher authority Budget holders will discuss with the Fiacial Cotroller appropriate parameters, plus maximum allowed deviatios before the budget holder or seior maager is brought i; this will be documeted. Fiace must be iformed if there are queries delayig authorisatio (of paymets) or if paymet is to be withheld for ay reaso.
i t e r a l c o t r o l s y s t e m s a d f r a u d 3 9 policies ad procedures statemet accoutig ad fiace (extracts) Books of accout ad records Proper accoutig records will be kept. The accouts systems is based aroud computer facilities, usig Sage ad Excel, but maual/paper records will also be used if appropriate. The followig records will be kept: Appropriate cotrol accouts (bak cotrol, petty cash cotrol, VAT cotrol, salary cotrol) Mothly trial balaces Petty cash ad bak accouts will be recociled at least mothly VAT Returs produced o the required quarterly cycle orderig supplies ad services Budget holders ca place orders for goods or services withi their budget areas, subject oly to cash-flow restraits. All orders of 1,000 or more must be authorised by the budget holder, except for specific areas of expediture where writte procedures have bee agreed. Uder 1,000, the budget holder may delegate all orderig as appropriate. Budget holders will discuss with the Fiacial Cotroller appropriate parameters, plus maximum allowed deviatios before the budget holder or seior maager is brought i, which will be documeted. paymet authorisatio ad purchases ledger All ivoices must be authorised for paymet by the budget holder, although the actual checkig of details may be delegated. The authorisig departmet is resposible for checkig ivoices for accuracy i terms of figures ad coformity with the order placed, that the services or goods have bee received, ad followig up ay problems. Fiace must be iformed if there are queries delayig authorisatio or if paymet is to be withheld for ay reaso. A Purchases Ledger is operated by Fiace. All icomig ivoices are to be passed to Fiace sectio as soo as they arrive. Ivoices will be recorded i the Purchases Ledger withi two days, uless there are codig problems. They are the passed o to budget holders for authorisatio. Oce authorised as above, suppliers will be paid withi the appropriate timescale. cheque writig ad sigig Sigatories will oly be draw from seior staff ad directors, ad ay ew sigatory must be approved by the directors before the bak is otified. All cheques for 1,000 or over require two sigatories. Cheque sigatories should check that the expediture has bee authorised by the appropriate perso before sigig the cheque. Salary paymets require the sigature of the Accouts Maager or Fiacial Cotroller, plus oe other. Cheques should be filled i completely (with payee, amout i words ad figures, ad date) before cheques are siged. hadlig of cash Petty cash will be topped up o the 'imprest' system, where the amout spet is reimbursed. It is iteded for small items, up to 20. Aythig over this should be paid by cheque where possible. The imprest has a balace limit of 250. The petty cash balace will be recociled whe restorig the imprest balace, or mothly if this is more frequet. All cash collected from Fiace will be siged for, ad receipts will be issued for all cash retured.
4 0 i t e r a l c o t r o l a d a c c o u t i g p r o j e c t report writig hit Whe you are ivestigatig a accoutig system i the workplace, try to obtai access to the relevat Policies ad Procedures documet. It may ot be called precisely this, but may be set out as a operatios maual or eve separate sets of istructios for each sectio of the system, eg purchasig, petty cash or sales ivoicig. r e v i e w i g t h e a c c o u t i g s y s t e m Your review of a accoutig system, whether it is i the workplace or set out i a AAT Case Study will be covered i full i Chapter 5. You will eed to appreciate that if a accoutig system has weakesses it will be because the iteral cotrol system as see o the previous two pages will be deficiet i oe way or aother. This will lead to various possible problems: errors beig made because people do ot kow the correct way of doig thigs errors beig made ad ot beig picked up because the processes are ot beig checked properly ad lastly... fraud beig committed because the iteral cotrol system is deficiet ad the opportuity for fraud is there for the takig t y p e s o f f r a u d Fraud is a ufortuate fact of life withi orgaisatios. It sometimes hits the headlies, as whe a merchat baker s PA diverted over 1 millio of her employer s fuds ito desiger clothes, cars, speedboats, ad geeral high livig. This is obviously a extreme example which makes good material for the media, but the priciple ivolved is the same as the employee who walks off with the employer s statioery or petty cash, or who seaks out of work a hour early to watch a football match. Fraud withi a orgaisatio ca therefore be described as a activity which presets a threat of some form of loss to the employer: loss of moey, eg theft of petty cash loss of ivetory, eg theft of products by supermarket staff loss of time, eg disappearig from work to do somethig else durig cotracted work hours
i t e r a l c o t r o l s y s t e m s a d f r a u d 4 1 It is the resposibility of the maagemet of a orgaisatio to: idetify areas where the risk of fraud exists ad to grade the seriousess of the risk i each case set up cotrol systems ivolvig all staff to alert maagemet to possible occurrece of fraud moitor those cotrol systems o a regular basis to esure that they are workig deal with ay icidece of fraud i a appropriate way, whether it be a formal warig or callig i the police These will be dealt with i the course of this chapter. First, however, it is importat to defie i more detail what we mea by fraud. s o m e d e f i i t i o s Fraud covers a variety of offeces, but a geeral defiitio of fraud is: the use of deceptio with the itetio of obtaiig a advatage, avoidig a obligatio or causig loss to someoe else or to a orgaisatio Fraud is a crimial activity ad is covered i the UK by a umber of laws: theft false accoutig bribery ad corruptio deceptio dishoestly takig someoe else s property (Theft Act) dishoestly destroyig, defacig, cocealig or falsifyig a accoutig record for persoal gai or to cause loss to someoe else (Theft Act) takig or givig a bribe that might ifluece the actios of others (Prevetio of Corrupt Practices Acts) obtaiig property, moey, services or evadig liability by deceptio (Theft Act) p r a c t i c a l e x a m p l e s o f f r a u d I practical terms fraud is ormally a combiatio of ay of the followig: theft of property or moey or iformatio (eg someoe copyig ad sellig the compay s customer database to a competitor) falsificatio of records so that property or moey is passed to the wrog perso (eg someoe fiddlig the payroll) collusio ie a set-up betwee a employee ad someoe else outside the orgaisatio, eg false ivoices set i by a outsider for supplies that were ever made ad authorised ad paid by the perso o the iside
4 2 i t e r a l c o t r o l a d a c c o u t i g p r o j e c t p u b l i c e x a m p l e s o f f r a u d There are may examples of fraud which are made public. Studets ivolved i the public sector would fid it useful to ivestigate the HM Treasury Fraud Reports, available as dowloads from the website www.hmtreasury.gov.uk. These cotai examples of fraud i local authorities ad Govermet departmets. Types of fraud i the private sector are very similar. The examples below have bee adapted from cases reported by a leadig isurace compay. reported cases of fraud theft of fuel stocks Total Loss 25,000 A local authority had their ow fuel pumps for supplyig their motor vehicles. The employee i charge stole fuel over a log period as the ivetory checks were iadequate. payroll fraud: fictitious employees Total Loss 10,000 The maager of a idustrial cleaig compay iveted bogus employees, put them o the payroll ad the cashed their pay cheques. Bak deposits: teemig ad ladig I 10 moths a total of 7,000 was stole. A clerk i charge of a sub post office stole cash receipts due to be paid ito the local bak. This was covered up by delayig payig i at the bak ad alterig the payig-i slips relatig to subsequet deposits. Stealig moey received from oe source ad the usig moey received from other sources to cover it up is kow as teemig ad ladig. cheque pritig machie Total Loss 25,000 A ledger clerk resposible for makig regular paymet of ret for advertisig was i charge of a machie that prited cheques. Numerous small cheques were made out by him for the correct amouts but payable to him. It was several moths before complaits from creditors, (who had ot received their cheques) were ivestigated ad the fraud ucovered. collusio: stock cotrol system Total Loss 1 millio A well kow atioal compay was defrauded by two gags of employees workig at the same locatio. The losses ivolved collusio betwee warehouseme ad drivers who used the spare capacity o vehicles to remove goods from the depot. False iformatio was etered ito the computerised ivetory cotrol system ad their activities were oly discovered whe the police reported fidig large amouts of the particular product i the hads of third parties. collusio: fictitious sub-cotractors Total Loss exceeded 500,000 A major cotractor with well established cotrol systems to approve paymets were the victims of fraud by a sectio supervisor i collusio with a computer operator. Cheques were made out to fictitious sub-cotractors ad despatched to private addresses.
i t e r a l c o t r o l s y s t e m s a d f r a u d 4 3 report writig hit Whe you write about your aalysis of the curret accoutig system of your chose orgaisatio you will eed to provide evidece that you have ivestigated potetial areas of fraud. You will eed to be aware of the various types of fraud that ca be committed. r i s K a s s e s s m e t a d f r a u d r i s k a s s e s s m e t t h e r o l e o f m a a g e m e t Assessmet of fraud risk is part of the risk assessmet process which is the resposibility of orgaisatios i both the private ad the public sectors. I the case of limited compaies (private sector), the Turbull Report has stated that directors have resposibility for esurig that risk maagemet practices are established as part of a effective iteral cotrol system. I the public sector the guidig documet to fraud risk is HM Treasury s Maagig the Risk of Fraud a Guide for Maagers available as a dowload from www.hm-treasury.gov.uk The assessmet of risk geerally by maagemet follows a umber of distict stages. This process applies equally to the assessmet of fraud risk: settig up a risk maagemet group ad idetifyig objectives idetifyig the areas of risk of fraud gradig the scale of the risk i each case developig a strategy to maage that risk settig up systems to detect ad deal with fraud, allocatig resposibility gettig the systems up ad ruig moitorig the ruig of the system t h e i t e r a l c o t r o l s y s t e m A robust iteral cotrol system is essetial if maagemet is goig to be able to detect ad deal with fraud. There are various techiques that ca be used for makig a iteral cotrol system fraud resistat :
4 4 i t e r a l c o t r o l a d a c c o u t i g p r o j e c t fraud staff Some very large orgaisatios may appoit employees eg ex-bak or ex-police staff to work full-time o fraud prevetio ad detectio. maagemet resposibility Maagers should be give specific areas of resposibility ad aswerability eg sectios of the Accouts Departmet to esure that fraud is kept to a miimum. maagemet supervisio Maagemet particularly lie maagemet should supervise accoutig activities o a regular basis. This ivolves overseeig ad checkig activities such as data etry to computers, makig paymets ad payroll processig. segregatio of duties The system should be set up so that duties which, whe combied, could lead to fraud, are give to differet people ie they are segregated. For example, the cashier takig i cash for a busiess should ideally ot be the same perso who makes out the payig-i slip for the bak. The dager is that some of the cash may disappear ito the cashier s pocket. lock & key Physical security lockig valuable items away is a sure deterret to theft. This does ot oly apply to cash: the tedecy of items such as laptop computers ad mobile phoes to disappear has become a wellkow ad ever-icreasig statistic. authorisatio Some accoutig activities may require authorisatio by a omiated official. This rages from the authorisatio of petty cash, sigig of cheques over a certai amout to the ivestig of liquid fuds, eg placig 250,000 o a moey market accout. Clearly the larger the amout, the more seior the perso givig authorisatio. d e t e c t i g f r a u d We have already see the various areas i which fraud ca occur. Fraud ca be detected by the experieced maager by simple observatio ad through experiece. Some of the tell-tale ad dager sigs iclude: employees actig suspiciously lookig shifty ad hidig paperwork employees with higher levels of spedig tha you would expect from their icome the payroll clerk who has a ew Porsche
i t e r a l c o t r o l s y s t e m s a d f r a u d 4 5 employees workig log hours ad takig less tha the ormal holiday etitlemet it is ofte whe employees are away that other employees otice suspicious sigs ad ucover crimial activity employees who have a grudge agaist the orgaisatio they may have bee passed over for promotio or they may eve have a political or ethical axe to grid employees who are kow to be short of moey they may be strugglig with a high mortgage or may eve have a drugs problem g r a d i g l i k e l i h o o d a d i m p a c t Part of the process of the maagemet of fraud risk is the decisio about whether a risk is a likely oe or ot. The likelihood of risk ca be divided ito three levels: high the likelihood of fraud is at a high level (disappearig biros) moderate the likelihood is possible (theft of cash, collusio) low the likelihood is remote (removal of assets from a compay pesio fud) The risk of fraud occurrig ca also be give a umerical value: for example a rage of 1 to 5, where the higher the risk the higher the umber. Risk assessmet also eeds to decide whether the impact of the fraud is sigificat. Impact ca relate to the fiacial state of the orgaisatio. A major loss through fraud could seriously affect profit ad liquidity. For example, the fraudulet tradig by a employee of Barigs Bak led to its collapse. The fraud ca also seriously affect employees, as i the Robert Maxwell case i which employees pesios were appropriated by the Chairma ad Chief Executive. Geerally speakig, frauds that are likely (the disappearig biro) have a lower impact tha the remote risk (removal of assets from a compay pesio fud). The impact of a fraud ca therefore be similarly graded: high the effects of fraud are very serious for the orgaisatio, affectig its profit ad/or liquidity moderate the effects of the fraud are sigificat but ca be dealt with iterally, or i some cases by the police (theft, collusio) low the impact of the fraud is isigificat (petty pilferig) u s i g a m a t r i x t o g r a d e f r a u d r i s k Orgaisatios sometimes use a matrix to assess the extet of fraud risk i a accoutig system. The areas of the system i which the fraud might occur must first be idetified, for example:
4 6 i t e r a l c o t r o l a d a c c o u t i g p r o j e c t cash paymets cash receipts sales ledger purchases ledger expeses ivetory cotrol payroll fixed asset purchase A matrix (or a sectio of a matrix) will the be draw up for each of the areas idetified. A example of etries i a typical matrix is illustrated below. The matrix might display: the idetified risk area of the orgaisatio the details of the type of fraud the role of the employee who may become ivolved i it ay third party who may become ivolved through collusio the likelihood of the fraud (high, moderate, low) the impact of the fraud (high, moderate, low) This matrix will the become a valuable tool which will eable maagemet to assess the risks ad establish a appropriate strategy for miimisig them. Note that the format of the matrices you will ecouter i your studies may vary. The example below is fairly typical ad could be used i your Report. a c c o u t i g s y s t e m f r a u d m a t r i x s o m e s a m p l e e t r i e s details of risk employees collusio likelihood impact payroll sectio: Statioery pilferage payroll staff oe high low Theft of cash payroll staff oe moderate moderate Paymets to payroll staff third party moderate moderate fictitious employees recipiets purchase ledger: Payig fictitious buyer third party moderate moderate suppliers recipiets etc... etc...
i t e r a l c o t r o l s y s t e m s a d f r a u d 4 7 report writig hit It is recommeded that you should ot oly research ito potetial areas of fraud, but you should also idetify each type of fraud ad grade its risk (usig a high/medium/low or a umerical system) ad its impact, usig some form of matrix such as the oe o the previous page. Remember, however, that you will eed to be diplomatic with the orgaisatio that you are dealig with, as fraud is a very sesitive issue. f r a u d p o l i c y Fraud detectio is a importat fuctio i ay iteral cotrol system. We have already see earlier i this chapter some of the warig sigs of fraud which maagers should look out for as a matter of course. It is useful, however, for a orgaisatio to set up a Fraud Policy which might iclude: a clear idicatio of which maagers are resposible for which potetial areas of fraud ad at what levels settig up of cotrol systems to help avoid fraud, eg strict checkig, segregatio of tasks ad divisio of resposibilities, eg i the purchasig process the perso who sets up a purchase order should ot be the same as the perso who approves it or the perso who writes out cheques should ot be the same perso who sigs it (uless maybe it is for a very small amout) the regular moitorig of the cotrol systems to esure that they are workig satisfactorily ad are ameded from time-to-time as circumstaces require decisios about which type of frauds are sigificat (eg moderate ad high risk) ad should be acted upo ad those which should be geerally guarded agaist but which are low risk ad do ot require strict discipliary actio (eg the borrowed biro) the eed for a ati-fraud culture, ie istillig i employees the otio that ay form of fraud (icludig the borrowed biro) is iheretly wrog ad alertig them to the risks that exist followig o from the last poit, the mechaism should exist for whistleblowig, ie for employees to alert the maagemet if they become aware of ay fraudulet goigs-o at ay level of the orgaisatio; the employee i this case is give protectio by the Public Iterest Disclosure Act 1998
4 8 i t e r a l c o t r o l a d a c c o u t i g p r o j e c t a c t i o t a k e t o d e a l w i t h f r a u d As part of its Fraud Policy, a orgaisatio should set up a system which esures that the correct actio is take whe: fraud is discovered by someoe withi the orgaisatio fraud is reported by someoe outside the orgaisatio the police, for example Areas which should be dealt with are: provisio of clear directios to maagers about whom to cotact whe a fraud is discovered i a large orgaisatio the appoitmet of a seior maager with special resposibility for fraud who ca take resposibility for ay major occurreces directios for discipliary procedures for occurreces of fraud which will ot have to ivolve the police ad possible prosecutio directios for how to deal with a case of fraud which will ivolve the otificatio of the police ad may result i a crimial prosecutio directios for how to deal with a case of fraud which is reported to the orgaisatio by the police (eg the discovery of stole ivetory or a bak reportig suspicious moey trasactios) ad which may result i a crimial prosecutio As you will have gathered from this chapter, fraud is ievitable. The lesso for the orgaisatio is be prepared. report writig hit Your Report should iclude a ote of ay formal Fraud Policy, ad if this does ot exist, details of maagerial cotrol systems ad ay arragemets made for these systems to be moitored. Evidece of the itroductio of ay ati-fraud culture could also be icluded. s o m e u s e f u l w e b s i t e s www.sfo.gov.uk www.icaew.com www.hm-treasury.gov.uk I order to access iformatio about fraud you are likely to have to carry out a website search o fraud. This chapter cocludes with two Case Studies o fraud ad aalysis of fraud published by HM Treasury. They should provide you with a uderstadig of how a weakess i the accoutig system ca make fraud possible.
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