Rise in fraud blamed on economy

HARSH economic conditions are pressurising normally honest company directors and employees to resort to fraud to rob their companies, leading accountants claimed at the CPA Practitioners’ Conference 2011.

President of the Institute of Certified Public Accountants Gail McEvoy said yesterday both companies and individuals are experiencing unprecedented levels of debt, adding that anecdotal evidence indicates fraud is becoming a serious problem.

“People lose all rational thought when they are desperate. They become convinced that they can get away with ‘cooking the books’ to cover the magnitude of debt or that they can defraud the company to fund unsustainable personal lifestyles. All accountants and auditors need to be increasingly vigilant to fraud,” she said.