News |Risk Management

9th November 2021

Joint Fraud Taskforce: Accountants to play key role in tackling fraud

Accountancy 1 of 3 sectors included in the relaunch of the UK Home Office’s Joint Fraud Taskforce.

The Home Secretary Priti Patel has announced the relaunch of the Joint Fraud Taskforce against the backdrop of a 24% rise in fraud during the Covid-19 pandemic.

The relaunch recognises the key role accountants can play in identifying fraud and educating themselves and their clients on how to do the same. It also highlights accountants as being potential targets for fraudsters, while admitting that the number of fraud cases that involve an accountant is currently low.

For the same reasons that accountants have been recognised as potentially important in the fight against fraud – i.e. their control of / closeness to companies’ finances and their role as trusted advisors, the taskforce highlights accountants as potential fraudsters, with opportunities to commit fraud that few others have.

New fraud charter for the accountancy profession

As a result, the taskforce’s ‘Accountancy Sector Fraud Charter’ includes actions to “drive greater transparency…across the accountancy sector”, as well as to better equip accountants to spot, deal with and educate others on fraud risks. The charter has, so far, been supported by 12 accountancy sector professional bodies, including the ICAEW.

Developed by the Home Office and the profession in partnership, the charter has 4 main actions intended to be delivered in collaboration with the profession, government, and law enforcement agencies.

  1. The first is to identify areas of vulnerability within the accountancy sector with a view to providing the sector with a clearer understanding of the risk of fraud in the UK.
  2. The second action centres on the training and education to be led by the ICAEW, beginning with reminders to the profession on how to spot red flags for fraud within their clients and to avoid them becoming victims themselves.
  3. The third forms part of the government commitment to reform companies house by improving the accuracy of information held and prevent the misuse of corporate entities by fraudsters. The sector will work to address the misuse of accountancy firms details whereby they falsely use an accountants address as their registered office to gain legitimacy or claim to have had accounts prepared or audited by a firm.
  4. The fourth is to increase fraud awareness among businesses and the public through the National Economic Crime Centre, which the accountancy sector will support.

Other areas covered by the Joint Fraud Taskforce

The other sectors in the relaunch are telecommunications and retail banking, with signatories of the respective charters including all major high street banks and the leading telecommunications companies, such as BT EE, Vodafone and Virgin Media O2.

The taskforce will be chaired by Minister for Security Damian Hinds, who described fraud as “a devastating crime that impacts around 1 in 13 of us each year”.

The claim that “fraud now represents over a third of all UK crime.”

October’s relaunch of the taskforce was part of the Fraud Action Plan Framework agreed at the government’s Economic Crime Strategic Board earlier in 2021. First established in 2016, the Joint Fraud Taskforce spent more than a year in the wilderness after a 2019 restructure before being brought back under Home Office control at the end of 2020.

It remains to be seen how effective the latest iteration of the taskforce will be, although the Home Secretary has conceded that “government alone cannot fix this which is why the Joint Fraud Taskforce will bring together key business leaders to work in partnership to protect the public”.

The Home Office’s press release on the relaunch includes a note “encouraging the public to forward suspicious text messages to 7726 (which is free of charge) and…report fraud to the police through Action Fraud”.

How ESA Risk can help

Fraud prevention and fraud investigations are areas where we possess the expertise and experience to help you and your business. These are topics we’ve written extensively on, with guides including ‘Fraud prevention in 5 steps’ and ‘Charities: What to do if you suspect fraud’ (equally useful for non-charity sector organisations).

For advice on fraud prevention, or for support investigating a suspected fraud, please contact us at advice@esarisk.com, on +44 (0)843 515 8686 or via our contact form.

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