More legal news
19 September 2002 | David Arminas
The head of the City of London Police Fraud Squad has urged purchasers to be more active in protecting their companies from fraud.
Detective superintendent Ken Farrow said purchasers should not shy away from the issue but meet it head on.
He told SM: “Supply chain professionals should not be afraid to bring this up with their senior managers or the board.
“There should be no shame in bringing this to their attention because it’s as critical as fire, flood and other business risks.
“In many ways it’s more likely to hit you than these other events, so you must manage that risk effectively.”
A report from KPMG’s forensics unit noted that fraud cases being heard in UK courts increased from 19 in the second half of 2001 to 35 in the first half of 2002, and cost the economy up to £16 billion annually overall.
Farrow said he believed local police forces were stretched and called for the formation of a national fraud squad.
He said CIPS and the Institute of Chartered Accountants in England and Wales had major roles in promoting awareness of fraud and the risks it poses, especially to supply chain partnership arrangements.
“Fraud undermines people’s confidence in dealing with companies and that impacts on development of business, such as partnerships.”
Roy Ayliffe, CIPS’s director of professional practice, said damage to a firm’s image could cause supply chain problems.
“It damages not only a purchaser’s own company, but also the relationships with key suppliers, whose images may also be at stake,” he said.
A new CIPS position paper on fraud advises purchasers to be constantly on the alert for fraud and report wayward buying practices to senior management.