BDO LLP warns of fraud risk.

Latest Central South Report from BDO suggests local businesses are at greater risk of corporate fraud in the current economic climate

The Central South Report recently published by BDO LLP in Southampton estimates that 80 per cent of the top 150 businesses featured were exposed to fraud, and highlighted a lack of internal controls to prevent and detect fraud at an early stage. The report warns businesses to increase their vigilance against fraud in the current economic climate, borne out by recent news stories of prosecutions for large scale fraud. For example, an Alliance and Leicester Regional Manager in Southampton managed to take £140,000 over three years, and an accounts clerk at Dorelbury in Fareham defrauded £60,000 from the company and its customers and gained over £450,000 as a result of her fraudulent activities. The Central South Report suggests that the official fraud figure for the region was £8.8m, although BDO LLP experts estimate that this number would be significantly higher were it not for the fact that a percentage of all frauds go unreported to the board or the police for fears of the impact on the company image. Mike Mason, Head of Fraud at BDO LLP in Southampton said: “Fraud should be given much greater consideration both during and immediately post recession because cost cutting measures such as reduced headcounts and formal redundancy programmes increase a company’s vulnerability. Furthermore, losses caused by fraud can exacerbate constraints on cash flow, liquidity and profits for a company already tightening its belt. We’ve seen a significant increase in enquiries and so we felt it was vital to include advice on how to radically reduce exposure to fraud within the Central South Report.” For a copy of the report please email Emma Wareham at BDO in Southampton: emma.wareham@bdo.co.uk or visit the website at www.bdo.co.uk/centralsouthreport ENDS

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