Employee Investigations

Below are three articles which appeared on mybusiness.co.uk...

'DRAMATIC RISE' IN STAFF FRAUD

Accountants say they have uncovered a dramatic increase in instances of theft from businesses by employees.

BDO Stoy Hayward warned that companies are particularly vulnerable during public holidays, especially Christmas and New Year, because fraudsters have plenty of time to commit fraud and cover their tracks.

The controversial warning came as BDO announced an 81% increase in cases of fraud against businesses by workers between 2003 and 2005. It said the value of this crime jumped from £43m to £78m during the period.

That represents 20% of all fraud cases in 2005, compared with 12% in 2004 and 13% in 2003. BDO added that the real cost could be considerably higher, because of the high rate of instances that go unreported.

Andrew Durant, head of fraud investigation at BDO, said: "I know from personal experience of investigating hundreds of frauds that Christmas is a favourite time for fraudsters to be busy.

"Management's eyes are off the ball in the run up to Christmas and the long holiday allows the fraudster to be in the office for extended periods with few people around, so they can work undisturbed."

BDO provides the following tips for returning owner managers:

• Check with security to see if there were any unexpected attendances, late nights or weekend working over the holiday.
• Never pre-sign blank cheques, letterheads or authorisation forms ahead of time, to cover the holiday period if you did do this, confirm how these were used and get back any unused ones.
• Scrutinise any requests for approvals for "urgent" transactions.
• Check whether staff accessed parts of the computer system which they would not need to access.
• Check that all payments were authorised by people with the correct authority.
• Review telephone and fax logs for unusual activity.
• Scrutinise bank statements for unusual or unexpected transactions.
• Check that back-ups of servers have been completed successfully.
• Identify and follow up any changes to master files.
• Investigate any unexplained absences after the holiday period (the person might have already made their get away and have a week's head start).

HALF OF ALL LONDON FIRMS 'SUFFER FROM CRIME'

Nearly half of all London businesses have been the victim of criminal activity within the last year and is running at epidemic levels, according to a business pressure group.

Research from the London Chamber of Commerce and Industry (LCCI) has shown that 47% of company directors say their businesses have been victims of crime, with burglary and shoplifting the most pervasive, affecting nearly a quarter of respondents in the group's poll.

A further 21% cited anti-social behaviour and vandalism as their most common problem, while 15% complained of external fraud and 11% internal fraud.

Some 37% of companies were victims more than once but no more than five times, but 4% had to deal with criminal activity on a staggering 15 occasions.

For the majority, crime had cost them between £0 and £1,000, but 11% said they spent over £10,000 last year as a result of crime.

Smaller businesses find themselves at the front line when it comes to the battle with crime, said LCCI president Michael Cassidy. They tend not to complain. But the reality is, higher priority should be given to this problem in London given the worrying picture emerging from these figures.

There is much talk about increased resources for London's police but you can forgive the average shopkeeper for asking 'where are they' when you look at the shocking tale of crime against this sector over recent months.

Still, despite the number, nearly eight in 10 respondents said they believe that London is a safe place to run a business.

UK EMPLOYEES ADMIT SNOOPING

Nearly a quarter (22%) of UK employees admit to illegally hacking into their employer's IT systems to access information such as salary details, a new report has said.

Over half (54%) of those questioned said they would view sensitive information if they were given the opportunity.

The report, commissioned by Microsoft, also asked respondents about the type of information they would be most tempted to access.

Human resources and payroll information was the most popular target, with 36% of employees admitting they would most like to view information about their colleagues, followed by 28% who said they would like to see their manager's personal notes.

Some 6% said they would steal a colleague's password if presented with the opportunity.

Men emerged as the least trustworthy employees, with 27% of men, compared to 16% of women, admitting to having stolen confidential information.

Workers in London and Scotland (25%) were the most likely to offend, with the most honest workers living in the Midlands (18%).

Infrastructure Server Marketing team leader at Microsoft Annemarie Duffy, said: The results of this survey were surprising. Particularly worrying is how vulnerable HR and payroll information has become. HR departments typically hold information that could be damaging for business and individuals if in the wrong hands.