Jonathan Middup, Partner at Ernst & Young’s Fraud Investigation & Dispute Services practice, says “We see a clear increase in fraud detection where companies enforce a compulsory two week break over summer.  Perpetrators are away and not able to cover their tracks easily. Frauds, such as accounts manipulation that are covered up in the course of the year are often spotted when colleagues take over and notice something is not quite right.

"The profile of a typical fraudster is a long serving, trusted employee, who works long hours and is reluctant to take their annual leave.  Without doubt, one of the most simple and cost-effective anti-fraud measures is to ensure employees take at least two consecutive weeks holiday.”

Current pressures on staff

This year’s summer window is likely to be even more intense, as Ernst & Young research reveals that the economic downturn is putting increased pressure on employees to cut corners.  Ernst & Young’s 2011 European fraud survey found that 88% of UK companies expect increased pressure on managers to deliver good financial performance, above the European average.  Half of all UK managers surveyed say that they are likely to cut corners to meet targets.

Middup continues: “The pressure is escalated this summer, given the level of concern about the economic situation and strong pressure to deliver on targets.  Our findings show that many employees are finding work stresses unusually intense.”

Ernst & Young advises firms to: 
·        Encourage a sustained holiday for staff; 
·        Properly investigate issues which may at first appear to be a mistake or where suspicions may seem trivial; 
·        Have clear policies about what constitutes unacceptable behaviour and what action will taken against fraudsters; 
·        Get your processes right.  Businesses should appoint an officer to undertake a risk assessment.  Record incidents where ethical standards may have been breached, log concerns, and build the learning points into future processes; 
·        Train employees to ensure they understand your policies.  Give adequate support and ask employees to sign compliance statements; 
·        Demonstrate a message of zero tolerance.  As a first step, discuss the issues at a board meeting and ensure the minutes reflect that you have added anti-fraud measures to your code of conduct.

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