1 February 2001 - A report from the Association of Chartered Certified Accountants (ACCA)
says that management gain is the main reason for corporate fraud. The ACCA surveyed 1250 member
firms in the UK on the incidence of fraud in small-medium companies. As these firms averaged
215 clients, the report covers the incidence of fraud in over 260,000 British companies.It found that 75% per cent
of reported frauds involved company managers.
The survey concludes that the principal cause of fraud is personal gain by management.
Fraud is often done by manipulating financial records in order to disguise, suppress or alter
transactions. Managers over-rode the company's financial control in 42% of cases to allow the
fraud to happen. 45% of discovered fraud is brought to light by auditors - not by companies own
According to Jonathan Beckerlegge, Chairman of ACCA's Audit Committee:
"This extensive survey demonstrates that audit is the most effective deterrent to fraud. In
the experience of our respondents, it was the auditor who, in the vast majority of cases,
discovered fraudulent activity. At a time when Government is looking for greater corporate
transparency and accountability, this survey shows the value of the audit."