ICAEW.com works better with JavaScript enabled.

Continue reading

Fraud and COVID-19 support

Government support schemes related to COVID-19, including the Coronavirus Job Retention Scheme (CJRS), the Self-Employment Income Support Scheme (SEISS) and the Bounce Back Loan Scheme (BBLS) will contribute to heightened fraud risks in many entities. Auditors assessing and responding to these risks will find ICAEW guidance helpful.

The COVID-19 pandemic and associated uncertainties have helped to create perfect conditions for fraud to thrive. Changes to working practices and control environments, increased financial pressures on companies and individuals, heightened risks of company insolvency and job losses all contribute. Even government support schemes to reduce the economic impact of the COVID-19 pandemic and lockdowns have provided triggers for fraud by presenting new opportunities, pressures, motivations, incentives and rationalisations.Government support

Government support schemes may incentivise fraud; their unfamiliarity will certainly increase the potential for fraud and error. In the UK, the National Audit Office (public spending watchdog) is expecting an increase in both. It has estimated that for the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS), the cost of fraud and error could amount to £3.9bn, while the Bounce Back Loan Scheme (BBLS) may lose £26bn over its lifetime. Other countries could face similar challenges.