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Fraud cases rise in Northern Ireland but firms better at uncovering scams

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Michael Jennings, head of forensic accounting at BDO Northern Ireland, said there had been an increase of 29% in the number of reported fraud cases from 2013 to 2014

Michael Jennings, head of forensic accounting at BDO Northern Ireland, said there had been an increase of 29% in the number of reported fraud cases from 2013 to 2014

Michael Jennings, head of forensic accounting at BDO Northern Ireland, said there had been an increase of 29% in the number of reported fraud cases from 2013 to 2014

The number of reported company fraud cases is on the rise in Northern Ireland, as firms are getting better at detecting scams.

There were 22 reported fraud cases over the value of £50,000 in 2014 - up from 17 in 2013, according to business advisors BDO.

The total cost of the fraud cases was £10m in 2014, an increase from £7.3m the previous year.

While Northern Ireland saw a rise in fraud, the UK average dropped to its lowest level in more than a decade.

Michael Jennings, head of forensic accounting at BDO Northern Ireland, said: "While the statistics demonstrate that the majority of UK regions have witnessed a decline in the level of fraud, contrary to this, Northern Ireland has experienced an increase of 29% in the number of reported fraud cases from 2013 to 2014, along with an increase in the value of reported fraud of 38% in the same period.

"The growth can be explained by improvement in the systems employed by businesses to identify fraudulent activity.

"In our experience there are a number of reasons for this increase. The onset of the recession in 2008, and the subsequent pressure on individual and business finances, has resulted in an anticipated increase in the level of fraud cases.

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"However, in response to this, business owners and managers have become more informed about the impact of fraud and have become better equipped to uncover instances and take action. Therefore, it is not only the case that actual instances of fraud are increasing, but also businesses are getting better at detection."

Mr Jennings said that in his work, he had seen elements of fraud during disputes between businesses.

"We have also identified elements of fraudulent activity in other aspects of forensic work, particularly within businesses being valued for the purposes of matrimonial or commercial disputes."

The emergence of whistleblowers has also played a role in the increase in cases. Businesses are now better equipped to help workers highlight problems within the company."

Mr Jennings said: "We have experienced cases recently where the fraud has been detected as a result of whistleblowing. The increased emphasis in organisations to support workplace whistleblowing and provide support for individuals to come forward will also have had an impact on the number of fraud cases reported."

As the economic situation begins to improve and the recovery kicks in, there should be a decline in the number of fraud cases and Northern Ireland will come more into line with the rest of the UK, Mr Jennings said. "While the recession has undoubtedly impacted the level of fraudulent activity, we anticipate that as we are now moving into a period of recovery, we will also experience a decrease in the level of reported fraud."

Mr Jennings highlighted, while strong internal prevention controls are essential, it is important for management to be vigilant.

"There has been a focus in recent years for businesses to have strong internal controls in place to prevent fraud. However it should be noted that while important, controls alone are not a watertight solution due to the ever-changing nature of fraudulent activity. Therefore ongoing vigilance and monitoring by business owners and managers will be paramount."


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