Fraud reporting to SFO jumps to ‘highest level’

The number of fraud reports made to the Serious Fraud Office (SFO) has jumped 13% to 998 in the year to 31 March 2021 from 882 in previous year, marking its highest level in four years according to Confirmation, which is part of Thomson Reuters.

The SFO investigates serious or complex fraud, bribery and corruption, including significant instances of accounting and audit fraud.

The group suggested that one reason for the rise may be due to the “economic stress” caused by the pandemic which in turn put pressure on struggling businesses to engage in fraudulent activity to help their company survive such as misreporting their earnings to keep lenders or investors onside.

At the same time, auditors are stepping up their efforts to proactively identify fraud, spurred by broader action within the profession to improve the quality of audits.

Kyle Gibbons, managing director, Europe, Thomson Reuters’ Confirmation, said: “These reports to the SFO give an indication of the increased pressure the pandemic has put on businesses and senior executives that can lead to more fraud being committed”

“Spotting fraud is increasingly seen as an integral part of an auditor’s role. Auditors are likely to be ever more vigilant in identifying suspect activity. 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.”