Economic Crime Is Rising: Has your organisation considered how it would respond?

10 May 2016

If your organisation suddenly realised it had been the victim of economic crime, such as fraud, would you know what you needed to do to provide an effective response which reassures you, your staff, your stakeholders and your regulators?

With PwC’s Global Economic Crime Survey 2016 revealing that 55% of UK organisations have experienced some form of economic crime in the last 24 months - and that it’s now most likely a case of ‘when’ not ‘if’ a company will fall victim – all organisations should plan how they would respond.

Why Have a Plan?

In most situations the early stages of a crisis are the most crucial and the success of any subsequent investigation often hinges on the effectiveness of the organisation’s initial response. A knee-jerk reaction, which could potentially cause confusion, invoke panic or unwillingly tip-off an individual to dispose of key incriminating evidence, should be avoided at all costs. Being prepared is key. However, rather inevitably, no two crises are the same and being prepared for the unknown can be hard.

Having a clear, documented fraud response plan in place ahead of time can help. The plan needs to be flexible, so that it can be utilised regardless of the circumstances your organisation is facing. Thinking ahead to the likely risks, and how to respond to those risks, will only help with the response in the heat of the moment. 

By adopting a proactive, not reactive approach to fraud and the risk of economic crime, your organisation will find itself in a more favourable position to handle the potentially significant impact of a crisis.

Ownership

Having a carefully considered fraud response plan in place should help to establish clarity of roles and an agreed understanding of the appropriate procedures to follow when responding to any suspected or detected fraud or other economic crime.

For example, a fraud response plan needs to be clear on who is going to own the response and direct any ensuing investigation in the correct way.

Who will the ‘owner’ of the response report to? How confident are you that they are sufficiently independent, and possess the appropriate skills and experience to get the investigation right? This should be carefully considered beforehand and documented accordingly in your fraud response plan.

Importance of Initial Response

A fraud response plan will help to ensure the right questions are asked. Think about the following questions and the importance of answering each of them correctly within the first 24 hours of a crisis.

  1. What / where are the sources of potential evidence relevant to the issue, and how can they be secured?
  2. Who could be involved, and what immediate action should be taken with those individuals in mind?
  3. Do any third parties need to be made aware of the issue, and who internally should be notified?
  4. Do you have the appropriate resources internally to react to the issue, or will you need to seek external assistance?
  5. What is the size of the potential risk of the issue to the organisation? i.e. if an allegation is true, what impact will it have?

It is our experience that when faced with a crisis, clients who have a clear and concise fraud response plan in place are more likely to avoid mistakes. For example, we often see organisations rush to conduct their own review of an individual’s email account. If a forensic copy of that account is not secured, such action may end up jeopardising the integrity of those emails as an evidence base.

In conclusion

The potential stress, interruptions and repercussions associated with being unprepared should be enough to make your organisation consider its own response well ahead of time.


Don’t have a fraud response plan in place, but think you should? We can help you to formulate exactly what you should consider in the face of the increasing levels of economic crime, such as fraud, please get in touch to discuss these issues further.


 

James Tweddle | Senior Manager
Tel: 0113 289 4073 | Email

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