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| Sunday, 27 November 2005 |
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| News Business Features Editorial
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Money laundering increases 29%, hits turnover by 5% by Surekha Galagoda
Financial Crime and Money Laundering are problems faced by every organisation but many are totally unprepared to deal with it when faced with it, said one of UK's leading experts on Financial Crime and Money Laundering David Cafferty. He said that losses due to financial crime and money laundering are increasing by about 29% and affects 5% of the turnover. A total of 80% of all fraud involves employees while 60% is committed by the senior managers. In the UK alone the losses amount to Sterling Pounds 7.50 per day per employee. Cafferty said that there are more male fraudsters than female fraudsters and the ratio is 6:1. Women steal for need while men steal for greed. Senior staff are more likely to commit a fraud compared to the junior staff but the length of service is immaterial. "The shortest time I have seen a person commit a fraud after assuming duty was one and a half days and by the time he was caught he had stolen 1.25 million pounds," Cafferty said. Fraud can take place due to many reasons such as mutual trust and respect, poor internal controls, opportunity, stupidity and bad management, pressure of work, priorities and in not recognising it as fraud. He said that bad guys are already ahead in the game and it is more likely that the fraudster is working for you rather than for somebody else. Therefore develop an integrated strategy for fraud prevention and control, an ownership structure that cascades down throughout the organisation, introduce a fraud policy statement, ethics policy statement, actively promote the policies throughout the organisation, establish a sound control environment, develop sound operational control procedures, introduce fraud education, training, and awareness program, fraud response plan, whistle blowing policy, reporting hotline, constantly revives all policies and procedures, monitor adherence to policies and procedures, establish a learn experience group and develop an appropriate information and communication system. He said that effective fraud management strategies will give rise to effective fraud prevention strategies, act as a deterrent,increase the likelihood of disruption, aid identification of high risk and problematic areas of business and reduce the need for civil action and procedures. The CIMA mastercourse on Financial crime and Money Laundering was sponsored by Hayleys AIG was the Principal sponsor while Pan Audio and ART TV were the official sponsors. |
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