Changing Approach To Dealing With Fraud?

I have always maintained that investigating financial crime requires a logical and numerate mind along with a healthy measure of common sense. This is why it is difficult to teach fraud investigation methods to students and why it is difficult to advise somebody when they ask you “how to get into forensic accounting”.

I regularly receive letters and emails from hopeful candidates wishing to become fraud specialists or pursue a career in forensic accounting. My advice is that their best chance is to qualify first, preferably (in my view) as an accountant. Accountancy is probably the best base on which to develop a specialist career in criminal financial investigation because it provides training and experience in the very medium in which fraud is committed. It is all very well learning the law, but without numeracy and business acumen, understanding financial crime would be impossible.

The Serious Fraud Office is often criticised for its failures. However, it is tasked with handling only the most complex (and therefore difficult) of fraud and corruption cases. The issues involve murkey interpretations of complex legislation and require activities that have taken place in hugely different political arenas to be unraveled. Therefore, it may be possible to forgive the SFO for employing more lawyers than accountants!

Yet accountancy is the core skill required of anybody wishing to pick the bones of a fraud to try and understand how the losses were allowed to happen and where the money went. Quantifying losses so that a fraudster can be convicted, or sued so the assets can be recovered, can be a complicated process requiring many different financial documents to be examined and interpreted. But essentially the task is to “add up” the figures, and isn’t that what accountants do?

This is why it amazes me that major police forces with substantial fraud resources might only employ one or two number crunchers. These technicians are not enough to support the many officers who are tasked with investigating the criminal aspects of the fraud, and it is no excuse blaming the dwindling budgets when employing such limited resources.

My frustration surrounding police resources dates back a few years when I was developing my own fraud investigation speciality and my attempts to develop working relationships with a number of police forces around the UK. I did have much success, and indeed continue to provide expert accounting assistance to several forces from time to time. But the message has always been clear, resources are limited and forces cannot afford to employ experienced forensic accountants as often as they would like. The frustration comes from knowing that even the introduction of a moderate amount of front line expert accountancy would improve many of the cases and certainly reduce the cost to the public purse when you consider the work generated by the criminal defence team further down the line (which includes the cost of independent forensic accountants like myself to pick apart the results presented by the police). We are all specialist in our own areas, and I believe that our excellent police fraud investigators should be provided with more accounting expertise in order to provide a more efficient and cost effective service to protect the public against the financial criminals.

My inspiration for revisiting my earlier attempts to forge strong relationships with investigating officers came from a recent spate of assignments for South Wales Police, Northumbria Police and a couple for Scotland Yard. The message was being repeated, too little resource for experts but refreshingly a growing realisation that the use of independent expertise can both prevent wasted effort and also sometimes direct available resources in a better direction. It is all about working as a team – public and private enterprise if you like!

So with the possibility of a fresh approach to dealing with complex fraud looming, I have begun to revisit some of my earlier thoughts on fraud investigation methods and ways in

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