White collar fraud continues to surface in Midlands’ businesses as financial pressures brought on by a tough economic climate forces them to put spending under the spotlight.
And in some cases the fraudulent activity may have been going on undetected for years, says expert forensic accountant Helen Gregory, associate director in the forensic accounting team in RSM Tenon’s Birmingham office.
The frauds may range from simple abuse of expenses procedures through to company directors taking money out of a business they know to be in trouble.
She explained: “The difficult economic conditions have taken their toll on so many regional businesses and we all know that many have been under cash flow pressures in particular.
“But as companies have come under pressure, they have been forced to scrutinise their finances ever more closely. It is at this point that some of these irregularities are starting to surface.”
Helen has in excess of 13 years’ experience in forensic accounting, analysing commercial disputes, probing claims of professional negligence and investigating fraud. She has acted in a number of high-profile criminal and civil cases, and has twice been seconded to the Serious Fraud Office.
She is regularly called in to carry out detailed investigations when commercial disputes surface, and is regarded as an expert witness.
“It isn’t just the economic climate that lies behind these cases,” she said. “In some cases, fraudulent activity which is only now coming to light may have been quietly continuing for years, going unnoticed in businesses which enjoyed significant financial success during the boom years.
“Things changed for companies during the downturn. They may have shed staff and those left have started to take a much closer look at all aspects of financial performance. This is when the irregularities start to surface, even though they may have been going on for some time.”
In some cases, the irregularities concern directors themselves, says Helen: “If a company is apparently struggling to pay its bills then the suppliers to whom it owes money are entitled to start asking questions if they see the directors driving round in new cars. The problem is that smaller companies tend to just take these debts on the chin because they do not have the resources to fight a case.
“It doesn’t have to be like that, though. My advice is that if you suspect something or you get into dispute then you need to seek expert advice as early as you can. The reality of the situation can then be established. At RSM Tenon we have a qualified commercial mediator in our team who may be able to resolve what could otherwise be a painful and costly dispute.”
She added: “As many companies have discovered, not keeping a close eye on financial practices and processes can end up being extremely expensive. Failing to deal with irregularities, discrepancies or disputes can exact a similar price.”