Lawyers in the frame for Euro fraud detection role

A quarter of companies have no idea which staff should be responsible for preventing and detecting fraud, but 11% think it should be lawyers, according to a report by PricewaterhouseCoopers.The survey of more than 3,400 companies across 15 European countries found that 42% of large companies have been hit by economic fraud in the past two years, and that in 58% of cases this was discovered by accident rather than by design.George Staple, chairman of the Fraud Advisory Panel (FAP) and a partner at City firm Clifford Chance, said he was 'astonished' to see how few companies were capable of identifying where responsibility for fraud detection and prevention should lie.He said: 'The FAP has said that responsibility needs to be recognised at the highest level of companies, and this report confirms that.'Although he was unsurprised that 11% of respondents said responsibility lay with lawyers, he questioned whether they did so because their firms had proper structures in place, or just through instinct.In-house auditors were deemed responsible by a higher percentage of respondents: 29% thought them responsible for detection, and 35% for prevention of fraud.Alvin Shuttleworth, director of legal at British Nuclear Fuels and chairman of the Law Society's Commerce and Industry Group, said: 'The lead responsibility for fraud investigation should lie with auditors, though in-house lawyers should then become involved in the team.'He said it was crucial that there should be clear lines of responsibility and accountability within companies.Jeremy Fleming