The number of fraud reports made to the Serious Fraud Office jumped to its highest level in four years during the pandemic.
Fraud reports increased to 998 in the twelve months up to the end of March, a 13 per cent increase from last year’s 882 reports, according to Confirmation, part of Thomas Reuters.
The firm attributed the jump to a tough trading environment and the economic strain of the pandemic. Moreover, the pressure to identify fraud increased since the Wirecard and Luckin Coffee scandals, according to the research.
New auditing rules
As the end of May, the Financial Reporting Council said that auditors need to obtain ‘reasonable assurance’ that financial statements are free of fraud. Auditors need to comply with this rule by the 15 December of this year.
From December, Auditors will have to assess whether their engagement team requires specialised skills or knowledge to make a risk assessment of material misstatement due to fraud.
In addition, audit teams will have to investigate any evidence of unauthorised access to IT systems .An entity’s performance against industry trends and competitors must now also be considered.
“For individuals engaged in material fraud, auditors are now more likely than ever to be actively searching for any suspect activity,” said Kyle Gibbons, managing director of Confirmation.
“Technology and AI can play a key role in keeping the audit industry on top of material misstatements due to fraud and in the driving seat,” he added.