KPMG: Fraud prevention should stretch internally

News Article - 25 October 2006
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Effective fraud prevention must include internal company measures to minimise the potential for inaccurate auditing, according to a representative of accountancy firm KPMG.

The comments have been made by Adam Bates, global chairman of KPMG Forensic, following the sentence handed out to Enron's former chief executive Jeffrey Skilling this week.

Mr Skilling has received a 24-year prison sentence after being found guilty of 19 separate crimes while at the US energy trading firm, including fraud and insider dealing.

Mr Bates has welcomed the punishment but warned that potential jail sentences by themselves may not dissuade some company fraudsters.

"What is more important is to tackle the roots of fraud," he said.

"Companies need to ensure they have rigorous processes in place, at the highest level, so that fraudsters cannot create micro-environments for themselves in which to operate."

Enron, which was once believed to be the seventh largest company in the US, filed for bankruptcy in 2001 amid claims that several company bosses had taken steps to artificially inflate the business' share price.

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