Protecting your business against fraud – could audit be part of your strategy?

Fraud continues to remain at a much higher rate then pre-recessionary times and is rarely out of the news these days, with insider dealing, financial irregularities at free schools and money market manipulation all headlining in recent days, not to mention the on-going scandal involving Tesco’s financial statements. The Annual Fraud Indicator published in 2013 by the Home Office estimated that Fraud will cost the UK economy £52bn and it should be noted that a lot of fraud is carried out much closer to home that you may realise. Some of the current threats seen are:

  • Payment fraud – Standing Order fraud, Invoice fraud
  • Cheque fraud – Additional payee added, Overpayment/Refund Fraud
  • Internal fraud – Controls, Procurement fraud
  • External fraud – Hijacking of websites, Impersonation of officers, Theft of data
  • Online safety – Scams and phishing attacks, Diversion of website traffic

Has your business done all it can to mitigate against the risk of fraud?
Whilst a statutory audit is not intended to identify all threats of fraud within a business, or occurrences thereof, auditors are required to obtain reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error. It is often for this reason that some company directors and/or shareholders opt to have a statutory audit of their company’s financial statements, even if the company is exempt from audit. The level of assurance provided by a statutory audit can provide some peace of mind to shareholders, especially if they are somewhat removed from the day-to-day running of the business. Similarly, auditors are often best placed to carry out an independent and objective review of a company’s financial systems and controls and provide feedback to management on where improvements could be made. This is especially important for businesses experiencing a high level of growth.

If your company wishes to discuss the advantages of statutory audit or a systems and controls review, please do not hesitate to contact Matthew Grant, Director: mgrant@garbutt-elliott.co.uk 0113 273 9600.