Fraud is a very real risk to business, as the recent case at Société Générale has highlighted. According to top twenty accountancy firm, Kingston Smith LLP, incidences of corporate fraud are likely to increase, particularly if the economy slows down in the wake of the sub prime mortgage debacle.

Moira Hindson, forensic accounting partner at Kingston Smith LLP comments, “As we have seen, when control systems are compromised, the consequences can be costly. At the most extreme end of the scale, a single individual can put a company out of business. Over the past year, our forensic teams have seen evidence of money laundering, theft, insider dealing and false accounting in a number of companies. Virtually all of these could have been avoided if the managers had the right controls in place coupled with the understanding of how to spot a fraudster within their organisation.”

Kingston Smith LLP, which has provided forensic accounting services for over 25 years, provides its top five tips for fraud prevention.

1) Ensure that management fully understands the environment in which employees are operating and can place effective limits on their authority;

2) Segregate duties between those who are active in the market and those responsible for checking and recording their activities;

3) Make sure that information is properly protected. Be aware that in the wrong hands, knowledge of the control system can be lethal;

4) Consider compelling employees to take at least two consecutive weeks of holiday – anomalies often come to light during employee absences;

5) Don’t ignore your gut instincts – if you see a red flag, act on it even if you risk offending a trusted employee.

Kingston Smith LLP has extensive experience of investigating and reporting on business fraud, ranging from the theft of a few thousand pounds to profit diversion and multi-million pound accounting frauds. The team is able to identify the fraud, explain the circumstances in which it arose, advise on improvements to the control environment, and quantify the losses suffered. Team members are also experienced in giving evidence in court as expert witnesses.

For further details of the forensic services offered by Kingston Smith LLP, including Forensic IT, Asset Tracking, and Fraud Prevention Consultancy, contact Moira Hindson or Daniel Djanogly on 0207 566 3631