Lawyer Monthly - November 2022

How did COVID-19 affect fraud? We always expect fraud to peak during a crisis, and the pandemic was no exception. According to a 2021 benchmarking survey published by the Association of Certified Fraud Examiners (ACFE), 51% of organisations had uncovered more fraud since the onset of the pandemic. The report, ‘The Next Normal: Preparing for a Post-Pandemic Fraud Landscape’, also found 71% of entities expecting fraud to rise over the next 12 months. For fraud investigators, the digital acceleration and remote work precipitated by the crisis not only made employee fraud more likely – it made securing and identifying evidence of fraud all that much harder. Why has remote working increased the risk of employee fraud? Employee fraud was the most significant fraud risk during the pandemic. About one-third of employee fraud is caused by lack of internal controls, which was exacerbated by the global move to working from home. In the rush to respond to lockdowns, the priority was to provide staff with the necessary digital tools and hardware to do their jobs remotely. A business’s internal controls were a secondary thought. However, the lack or weakening of controls, and the fact that internal audit was also grounded, left the door open for unethical behaviour to grow. Some of this unethical behaviour has already been exposed, but the rest is still to be found. Key risk factors leading to heightened fraud risk during the pandemic included people becoming disengaged from work and culture, a lack of face-to-face compliance activities and increased financial stress. This is not to suggest that companies should avoid hybrid and remote work. The Talent Tech Outlook 2022 study by job site SCIKEY shows that remote working has now become the new normal, with 82% of employees preferring to work from home or other places rather than returning to the office. Notably, almost two-thirds (64%) of employees said they are more TheReshaped Landscape of Fraud Investigation 62 LAWYERMONTHLYNOVEMBER 2022 This month, we hear from Peter Glanville, Senior Managing Director at Ankura, who looks at the changing face of fraud investigation in the wake of the pandemic and the associated challenges of undertaking complex investigations. From the greater fraud risk created by remote working to the evidencegathering challenges of increasing digital sophistication, he explores the new layers of expertise required for an investigation to bear fruit. Expert Insight

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