subject: Who Is Better At Investigating Fraud? [print this page] Fraud is an ever increasing problem for the economy. Estimates put its cost at over 30 billion in the UK alone every year. If it is such a big problem there must be some form of protection for businesses and individuals who are the fraudsters targets.
Many believe that the first line of defence against a fraud is the police. Investigating fraud is one of many responsibilities held by the police, along with other regulators such as the Financial Services Authority and the Serious and Organised Crime Agency.
All police force web sites will advertise themselves as the first port of call if you suffer any crime, and therefore this should be the place to go to report fraud. The various police forces around the country will have a fraud squad or Economic Crime Unit of some description, but these have been dwindling in size over recent years. With the economic slump and pressure on the public sector to slash costs, this situation will not get any better.
This is why when you report a fraud to the police they may try to refer you to one of the other agencies or even ask you to consult with a specialist forensic accountant in order to investigate the fraud. They don't have enough available officers to pursue every fraud reported, which is why they often ignore the smaller ones.
So can it be the case that an accountant can deal with fraud as effectively as the police? It is important to compare like with like in this case and two issues must be considered first:
1. Many frauds are investigated by police constables who do not have any financial training.
2. Most forensic accountants offer a range of services and are not specialist fraud practitioners.
But if you look at a forensic accountant specialising in fraud and a trained police financial investigator, the better person to investigate fraud is not obvious.
One definition of fraud is stealing using deception. The deception is usually carried out within accounting records within some business or financial activity. Therefore, substantial accounting competence is needed to unpick a fraud. Then again, it is not just a matter of analysing records when conducting a fraud enquiry. It includes forensic document analysis, interviewing witnesses and managing other investigators. It requires a working knowledge of relevant laws and legal procedures. It requires precision and an enquiring mind, together with a robust approach.
Put simply, the best fraud investigators need to have the skills of the police and the abilities of the accountant - and anybody who does will be in great demand over the coming few years.
