The impact of COVID-19 has been saved
The impact of COVID-19
A changing landscape for fraud and conduct risks
The outbreak of COVID-19 brought significant and unprecedented operational disruption and uncertainty for businesses across all industry sectors. This in turn has created greater pressure on both businesses and individuals, increasing the incentives to commit fraud or misconduct, at the same time as providing greater opportunity to do so.
How do we combat risk in this ‘new normal? We discuss the following areas of fraud risk and misconduct that companies need to be alert to in the current rapidly changing business environment:
Key factors we explore further include:
- Financial misreporting, which may be seen in the exaggeration of financial performance and balance sheet strength through accounting manipulation, whether it be to assist in supporting a going concern assessment, to assist in a capital raising, to avoid breaching loan covenants or perhaps for mere personal gain.
- The misappropriation or extraction of funds (and data) from a business, whether through theft, fraud or external attack. Financial pressures on individuals may prove to be a trigger for internal fraud.
- Misconduct by agents, employees or management with the intention to create an advantage for a business and possibly the individuals concerned.