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COVID fraud: chartered accountants are the ‘ultimate gatekeepers’

Author: ICAEW Insights

Published: 30 Mar 2021

Why there has never been a more important time where chartered accountants must stand up and protect businesses, explains David Clarke, Chairman of the Fraud Advisory Panel.

When a small business is hit by fraud or cyber-attack they don't go to the police or their lawyer - they go to their accountant, according to research on alternatives to criminal prosecution conducted by the Fraud Advisory Panel. The organisation’s Chairman David Clarke firmly believes as ‘the ultimate gatekeepers’, chartered accountants are the answer to battling COVID fraud.

As a former detective chief superintendent and member of the UK government’s Fraud Review team, Clarke knows how beneficial it can be to have an accountant on his team. “When I ran the fraud squad, there was nothing better for me than knowing I had my force forensic accountant who was in with the team,” said Clarke.

“We need everybody at the helm ready to get through this storm,” he added. “And the best person to guide us through is one who knows how to navigate. It’s the chartered accountant who holds those charts and we need them on deck.”

What is the biggest threat to businesses?

Upon lockdown restrictions lifting and the economy beginning to recover, Clarke believes the biggest threat to a business will be an insider stealing money or data. Especially if the Bank of England’s worst-case scenario of a 9% rise in unemployment is true.

“If it does come to the worst, then we'll see layoffs and the talks about a potential hit on commercial office space - numbers will inevitably go down”, suggested Clarke. “That will result in a reduced headcount - in other words, job losses. And when you've got people left picking up the pieces who feel a bit angry, any one of them who feels let down or angry about this - you will get an insider”

What accountants can do?

Accountants should begin planning around what-ifs and insider-based scenarios for the next 18 months. Clarke encourages accountants to educate people on what they should be doing and warn them on what to look out for. “Give them techniques to identify what looks suspicious,” he added.

“One of the key things is reporting fraud,” he continued. “We're potentially facing the largest combined fraud ever and choosing not to share information about a group of criminals is unethical and immoral. You must report it.” 

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