The failure to prevent fraud provisions of the Economic Crime and Corporate Transparency Act 2023 (ECCTA) represent a significant opportunity and challenge for UK organisations in their efforts to reduce and control the risk of fraud. Responding appropriately to the new requirements will help an organisation demonstrate that it had reasonable procedures in place, should a fraud in its name occur from which it benefits. An appropriate response will have the added benefit of not just providing a defence against the corporate offence but will also provide the opportunity to strengthen anti-fraud controls against the organisation becoming a victim of fraud.
How we can support you
Failure to prevent fraud gap analysis
The main defence against the failure to prevent fraud is to demonstrate that reasonable procedures were in place aligned to six key principles:
- Top level commitment
- Risk assessment
- Proportionate risk-based fraud prevention procedures
- Communication
- Due diligence
- Monitoring and review
We help organisations assess themselves against these principles to identify where they may need to undertake further work to become compliant. We leverage our experience of working with many organisations to provide challenge and support, giving a clear picture of the as is and desired state, with a clear roadmap to help Boards and management on their fraud prevention journey.
Proportionate procedures
The legislation and supporting guidance expects organisations to address the most significant fraud risks they identify through ensuring proportionate procedures are in place. Utilising advances in technology, data and AI has the potential to make a step change in this area, allowing organisations to focus their resources most effectively to reduce the risk of fraud either by or against themselves. We are at the forefront of developing and supporting organisations implement new tech driven fraud prevention procedures, often as part of a wider fraud prevention advice including:
- Gap analysis of procedures compared to risks;
- Stress testing fraud prevention controls;
- Advising on potential procedures.
Fraud risk assessment
A clear, comprehensive fraud risk assessment will be key in demonstrating reasonable fraud prevention procedures are in place. This is not a straightforward task, with input and engagement needed from a wide range of stakeholders. We can bring our experience of advising clients for many years, and our deep understanding of how fraud works, to help organisations develop risk assessments that are robust and reliable, allowing Boards and management to focus on the greatest threats.
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