Barriers to the mandatory reporting of fraud: Finding solutions and sharing best practice

Perpetuity has been commissioned by the Association of Certified Fraud Examiners (ACFE) UK and the Fraud Advisory Panel (FAP) to conduct research to better understand fraud reporting by organisations in England and Wales, in order to see if there is a case for making this compulsory.

At present, there is no legal requirement in the England and Wales for a company to report a fraud, should one occur in its organisation. This is in contrast to money laundering, where those operating in the regulated sector have a duty to raise a suspicious activity report (SAR) should money laundering be suspected. This obviously raises the issue of whether the reporting of fraud should also be made mandatory, meaning that shareholders, employees, suppliers, and the general public would be fully aware of anything that may adversely affect the viability of a company.

Although there are a number of bodies that fraud can be reported to, including Action Fraud, there is generally a low-level of reporting from organisations for a number of reasons, not least the fear of reputational damage. Nonetheless, some countries have implemented mandatory reporting of fraud, therefore, we need to understand these further in order to see if such procedures would be workable in the England and Wales.

This research aims to help fill a gap in knowledge around this area in a changing world, and explores exactly what the impediments to reporting fraud are and how they can be overcome. As such, the research will focus on two main research questions:

1. What barriers currently exist that might limit the mandatory reporting of fraud by organisations?
2. What can we learn from other jurisdictions that have made the reporting of fraud mandatory?

To explore these topics further, we will shortly be publicising a survey which will consider current attitudes towards mandatory fraud reporting, as well as undertaking follow-up interviews.

Later in the month, as part of the Thought Leadership programme, we will be broadcasting a webinar discussing fraud reporting.

To take part in either the survey, or to attend the Thought Leadership Webinar, please see updates on our web site for further details.

If you want any more information about this research or have experience of mandatory fraud reporting in other jurisdictions, please contact Dr Janice Goldstraw-White (j.goldstraw-white@perpetuityresearch.com).