Fraud risk management

The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) introduced a corporate offence of failure to prevent fraud, in force from 1 September 2025.

Practice Note: How to manage fraud risk summarises the main elements of the failure to prevent fraud offence introduced through ECCTA 2023 and covers government expectations of the procedures organisations should have in place to prevent fraud and resulting compliance issues.

Failure to have such procedures in place can leave the organisation exposed to criminal offences, but you should also consider how to prevent your organisation falling victim to fraud. While these are different elements of fraud prevention, the risk management steps and preventative measures taken by commercial organisations are likely to be very similar. For this reason, both aspects of fraud risk management are covered in our content.

There are various ways fraud can occur internally and externally. In view of the ever changing tactics and increasing sophistication of frauds, you should ensure you and your staff and associates keep fraud risk management knowledge up to date.

Awareness is often the best defence against fraud.