ACE Group Warns UK SMEs About Higher Fraud Risk in 1st Quarter

February 4, 2015

Fraud cases are on the rise and the profile of fraudsters is changing to include more young individuals seeking to fund extravagant lifestyles, according to ACE Group.

As pressure on bank balances grows after the traditional Christmas excesses, ACE warns the first quarter is a time of heightened risk for employee fraud, particularly in small and medium-sized enterprises (SMEs).

Jane Bennett, UK product line head, Financial Institutions and Crime, ACE European Group said: “In small and medium-sized businesses we can find that financial processes and controls may be less rigorous than in larger organizations. Based on our experience of working with these businesses, we know that the implementation of some relatively simple internal controls can drastically reduce the likelihood of fraud or at the least ensure that incidents are detected early.”

To help employers mitigate the risk of fraud, ACE Group has identified a number of simple measures that SMEs can implement in order to safeguard their business during this period of heightened risk.

ACE Group’s 10 tips for fraud prevention:

  1. Regularly review or rotate the responsibility roster for payment authorisation, BACS payments, procurement and internal fund transfers
  2. Check there is segregation of duties, for example between purchase requisitions and invoice payments
  3. Test that financial controls are working adequately
  4. Conduct thorough background screening on all finance hires before employment
  5. Review bank access rights every six months
  6. Ensure invoices can only be created by one central function
  7. Introduce random external audits on a rotating basis in every country, even where audits are not mandatory
  8. Ensure access passwords are changed every three months
  9. Review your limits on transfers or payments regularly
  10. Ensure that each location throughout the company carries out the same level of controls as expected at head office

Source: ACE Group

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