Businesses across the world must step up vigilance on fraud risk in times of economic stress, according to CIMA’s ‘Fraud Risk Management: a guide to good practice’ information released today (16 February).
This is particularly important for small businesses. As recent high profile cases have centred on multinationals, SMEs may not realise that they are often more susceptible to fraudulent practices, and that they can be hit by proportionately higher losses which could prove crippling in the current economic climate.
Surveys are regularly carried out to try to estimate the true scale and cost of fraud to business and society. These surveys all indicate that fraud is prevalent within organisations and remains a serious and costly problem. Indeed, when CIMA surveyed 200 of its member FDs in the UK earlier on this year, it found that 55% felt that employee fraud posed a significant risk to their organisation.
‘Fraud Risk Management : a guide to good practice’ – see www.cimaglobal.com/fraud - will arm management accountants with guidance and case studies on how to prevent, detect and combat internal fraud.
Helenne Doody, innovation and development sSpecialist at CIMA, comments:
“Despite the serious risk that fraud presents to business, many organisations still do not have formal systems and procedures in place to prevent, detect and respond to fraud. While no system is completely foolproof, there are steps that can be taken to deter fraud. It is in assisting organisations in taking such steps that CIMA’s guide should prove valuable.”
CIMA’s approach is being endorsed by the Chartered Management Institute (CMI) following the publication of data which reveals low levels of trust within UK organisations coupled with fears over financial management capabilities.