Investigating the dark side of business: Mike Mason, F CCA, is a forensic accountant at accountants BDO and is also a barrister. He runs the Bar Standards Board's teaching on forensic accounting for family, civil and criminal law for all newly qualified barristers.
| Author | Mason, Mike |
| Position | What you learn on the... |
The starting point for this one-day course (six CPD hours) was an interest on the part of LIMA and BPP to increase training in the area of fraud. Corporate fraud has increased dramatically in recent years. Frauds of [pounds sterling]50,000 and above have increased 50 per cent in 2011 on the previous year, to [pounds sterling]2.6bn in the UK. We only know of about one-tenth of cases, but we know it's definitely on the rise. We're seeing it increase because of the number of instructions we're getting.
I would say it's a live topic for several reasons. In recessions, organisations reduce their head count so people are less likely to be supervised in areas of responsibility. And because of the recession they are also less likely to have been rewarded for their efforts so they have other financial motivations that come with being in an economic downturn to commit fraud.
Another issue is that directors start looking more closely at the accounts in a downturn. As a result, we have a lot of financial controllers, directors and company accountants on the two-day course.
We start the course by looking at what fraud is. We consider important concepts of the law on fraud; the burden of proof and how fraud occurs in the UK. In addition, we look at the type of person who carries out fraud and their motivations for doing so.
We then look at the different types of fraud. They can be categorised into three broad types: theft of assets, financial statement fraud (when sets of accounts are altered) and fraud against parties outside the organisation.
We then consider the different pieces of fraud legislation. They include the Fraud Act 2006, the Bribery Act 2010, the Proceeds of Crime Act 2002, and how the three statutes link in.
We then look at forensic accountants--how do they operate and what advice do they give?
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What is their role in deterring and investigating fraud?
We have a number of case studies and at this point we let delegates have a go at solving some of them. The role-play scenarios we offer depict real-life situations faced by organisations affected by fraud. In one scenario we examine how the Bribery Act and the Fraud Act interlink.
We then look at adequate anti-fraud procedures, i.e. what they need to be and what accounting controls need to be in place to prevent fraud
We touch on the area of money laundering, an activity that often follows on from fraud.
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