FAP Says Fraud Reporting Is Confusing
The Fraud Advisory Panel (FAP) advises streamlining of current fraud reporting requirements of corporate entities as they lack in linking threads and are confusing.
FAP is asking both the government and the business owners to develop a more coherent approach so that corporate frauds could be reduced. At present, such frauds are burdening UK economy by at least £30bn per annum.
The report of FAP is based on reviews on current practices by the stakeholders and the analysis carried out by industry experts. FAP has identified that most of the frauds are still not covered by the whistle blowers and routine internal controls have a minor role to play.
FAP was also of the opinion that anti-fraud task conducted by auditors is extensively misunderstood and exaggerated. It further added that companies should put in place some kind of internal fraud reporting arrangements.
It is not obligatory to report such frauds to the UK law enforcing agencies while compulsory obligation to such reporting to third parties is limited to the Financial Services Authority and money laundering to Serious Organized Crimes Agency.
Now, FAP is requesting both the government as well as business houses to take instances of frauds seriously and for that they should streamline the existing obligations to notify fraud and bring it within the net of legal and regulatory framework for whistle blowing.
It further wishes that companies give greater emphasis on social and ethical responsibilities and report frauds in the interest of the public. It also wants that there should be an educational campaign to put forward benefits of investing to prevent and detect fraud.
Ros Wright, Chairman of the FAP said that existing corporate fraud reporting system is ambiguous with an irrelevant mix of external and internal obligations.