February 13, 2009: Fraud is thriving in many Kenyan organisations due to inadequate forensic experts. The shortage has pushed other firms to turn to expensive fraud consultants to shore up their internal controls.
The scarcity has been attributed to lack of professionals to train forensic experts in Kenyan institutions, says Institute of Certified Public Accountants of Kenya (ICPAK), adding that their is no licensed institution offering training in forensic accounting in Kenya.
Most organisations have been offering short seminars on forensic accounting that are meant to create awareness rather than offer professional training in the discipline, said Caroline Kigen, the chief executive of ICPAK.
“Forensic accounting is a relatively new discipline in the country and that is why the corporate sector is experiencing a shortage,” she said, adding that the traditional CPA training has focused its curriculum on core accountancy training with little qualification in forensic skills.
“The demand from the corporate sector is growing and we need training.” The demand is coming both from the private and the public sector, which is currently gripped with multi-billion shillings scandals.
As a result, forensic consultants have increased their consultancy fees with many opting to work for international consultancy firms such as PricewaterhouseCoopers, Deloitte and KPMG. But a new trend shows efforts to set up training.
Kenya Institute of Studies in Criminal Justice plans to start offering diploma courses in forensic accounting. The diploma will be offered to only those students who are certified public accountants.
Association of the Certified Fraud Examiners (ACFE), formed last year, also is to offer the training. Fraud examiners go beyond the scope of forensic accountants. A fraud examiner is a qualified forensic accountant, but a forensic accountant is not always a fraud examiner.
Before the launch of the association here, Kenyans wishing to take the exam had to travel to South Africa.
Jane Mugo, the executive director of the association, said it is administering International Certified Fraud Examiners Certification as well as short training or organisations on fraud detection and avoidance knowledge.
This comes at a time when forensic specialists at PwC and KPMG are raising the alarm that the incidence of economic crime at the workplace is set to scale to new heights this year.
This will mainly be driven by further deterioration of employees’ living standards with junior employees stealing to make ends meet while managers dip their fingers into their employers’ pot to furnish their lifestyles.
“The realisation by employees that they are not successful rewarded at the workplace can intensify fraud,” says Martin Whitehead, head of forensic and Investigation at PwC in an earlier interview. “The incidence of economic crime might be magnified this year.”
Analysts are advising employers to tighten their internal controls in an effort to cut off the fertile environments in which fraudsters thrive and to scrutinise mainly the finance, operations and sales departments.
Analysts say low cadre staff and their supervisors are likely to intensify stealing with filling fake claims being their preferred avenue.
from stealing from their employers.
Currently, 60 per cent of fraudsters sit in the executive suite with remaining portion being taken by the rank and file staff and the supervisors.
But Mr Whitehead is predicting that the rank and file employees look poised to increase the share of fraud in 2009.
This is the class of employees that is bearing the greatest brunt of the increased cost of living.
As a result, firms have stepped up the hiring of internal fraud or forensic investigators as they race to match their fraudulent employees at their game.
Source: The Business Daily, Nairobi
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