Fraud "will grow" as region emerges from recession

FRAUD will grow as Yorkshire and Humber emerges from recession, according to a new report.

PricewaterhouseCoopers warned that firms face an increased risk of "green fraud" threat as the sustainability service sector expands.

The accountancy giant said the green sector, the public sector and cyber-crime were the three "fraud frontiers" which could be opened up because of back office cuts.

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Pay freezes and reduced career mobility have made many workers anxious about maintaining their living standards and their career prospects, it said. The rationalisation of administrative functions means more work is signed off with less scrutiny and internal audit activities have been pared back, creating opportunities for criminals, PWC said.

Tony Parton, partner and forensic accountant in Yorkshire and Humberside, said: "We are living through a period of pay freezes and slow economic growth and the recovery may be a long slog. For some, the desire to maintain their living standards can drive them to cross the line into committing fraud.

"Even as Yorkshire and Humberside comes out of recession the motivators for fraud will persist.

"Pay rises and rewards will not kick-in for a year or more after any significant economic recovery, so workers' experiences are unlikely to match news of improvements in share prices or trading conditions.

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"Reduced investment in compliance and checking processes makes it easier for fraudsters, both inside and outside organisations, to exploit weaknesses and opportunities. The result for the company can be reputational damage and stiff fines."