Failure to prevent fraud – Are you at risk of this new offence and how can better accounting and audits help?
As the Government continues to put preventative fraud measures in place, it is essential that companies and Limited Liability Partnerships (LLPs) understand any changes that impact them.
In September, a new regulation was introduced as part of the Economic Crime and Corporate Transparency Act 2023 that puts pressure on large companies to proactively ensure their fraud prevention procedures are up to standard.
The new failure to prevent fraud corporate offence will see companies and LLPs classed as committing fraud if any person associated with the company, such as an employee, agent, subsidiary or contractor, becomes involved in fraudulent activity that benefits the company.
The introduction of the law also covers what is deemed fraudulent behaviour, including:
These offences carry major fines, as the amount handed to companies is unlimited and, while companies may not be found guilty of the primary offence, the reputational damage can be significant.
The best approach is to ensure your accounting and auditing processes are robust enough to spot any concerns and that they enable you to address any issues efficiently.
By implementing reliable procedures, companies can manage fraud risk proactively, safeguarding both their finances and reputation.
For expert support in ensuring your accounting and auditing processes protect against fraud, contact us today.
We pride ourselves on delivering bespoke balanced solutions, combining strategic business advise with expertise in accountancy, tax and other specialist areas. We can help you to turn the numbers in to something meaningful, so that your business can realise its full potential.
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