Simon Bevan, of advisory firm BDO Stoy Hayward, said that his Leeds-based team's rising caseload is linked directly to the economic downturn.

He said that as management places greater scrutiny on company accounts, forensic experts are uncovering fraud which took place during the boom years.

He also warned of increasing vigilance from regulators, who "really start to kick the tyres" during a recession.

Mr Bevan said the scale of fraud at present is "very large".

He added: "There is a lot of hypocrisy in the UK that we think we are very clean and that it's a very dirty southern European disease.

"We are busier than we have ever been."

Senior management, including chief executives and finance directors, are more likely to commit fraud than other members of staff because they can exploit the systems put in place to prevent abuse, said Mr Bevan.

He said that fraud is commonplace in self-contained entities which have their own reporting lines, such as companies that are a division or a group or an overseas operation.

These frauds are exposed only when external auditors come in or if an honest employee decides to alert the management.

He added: "As you go into a recession, there is a reluctance to be a whistleblower. The UK has a very poor record on the way it treats whistleblowers. That's why fraud will be rising exponentially."

The head of fraud services unit – who has 22 people in his team – said that there are only two ways to defraud an organisation.

The first is to overstate costs, which commonly affects manufacturers and initially shows up as a stock loss.

The second is to dilute revenues, which tends to happen at service industries where there is no product.

Mr Bevan said that the majority of his work involves procurement fraud, where costs have been overstated because "somebody has had a backhander".

This is the biggest area, bar the banking sector.

He predicted more losses to be exposed in banks as a result of commercial lending, often against property.

Bank staff incentivised by bonuses, sought to add more loans to the bank's lending book during the property boom.

And banks employed fewer people with the experience to spot suspect transactions during the good times, he added.

Both have exacerbated the scale of the problem of fraud against banks.

Mr Bevan said for example: "Somebody comes along to the bank with a £100m valuation for a hotel, which is wrong, because somebody has had a backhander.

"The bank will lend 70 per cent. The borrower will move facilities to another bank after a year. He will then ask for £10m for a new leisure centre, which will improve the business.

"The bank has lent £80m on something it thought was worth £100m. The true value was £70m, without a falling property market. A falling property market means the value was £50m, which means the bank has lost £30m.

"A bank might get seven or eight loans that all go bad at the same time. That's how, all of a sudden, you get massive holes in bank loan portfolios.

"The banks will get heavily hit. They will learn about it, improve their systems and then, after five years, start to relax and then get hit again."

FRAUD FIGURES

Ten per cent of your workforce are looking to defraud your organisation, according to Simon Bevan, the head of fraud services unit at BDO Stoy Hayward.

"But you can live with that," he said. "That's the norm. There's probably one per cent that would cause you fantastic financial loss
or cause you serious embarrassment in the market place.

"You cannot design out fraud but you can put trip wires in place which can identify fraud."

He said that about 10 per cent of his cases go to civil court; about 50 per cent get settled out of court and the rest are quietly resolved with an employee sacked.

"Clients want confidentiality."

Only a small proportion are passed on to the police.