77% of IT Professionals Believe Enron-Scale Scandal Could Happen in the UK
The findings of a survey by document management software company, Version One (V1 Document Management's UK based sister company), highlight that over three-quarters of senior IT professionals believe that a case of fraudulent activity on the scale of Enron could happen in the UK. Version One carried out the research with 70 senior IT professionals (IT directors and managers) across a range of public and private sector organizations.
The survey reveals that 77% of senior IT professionals believe an Enron-scale scandal could occur in the UK due to "greed, panic, lax systems and apathy". 89% stated that someone in their organization would be able to tamper with or 'lose' a document to suit their ends whilst 30% admitted that they had come across activity that could be considered fraudulent involving business documents. Two thirds of these stating that they'd witnessed document fraud "a number of times". Only a minority of respondents (6%) feel that current UK financial regulations would prevent a similar Enron-scale case of misreporting.
Lynne Munns, General Manager of Version One, says, "A false accounting scandal mirroring Arthur Andersen and Enron will always remain a possibility without effective preventative measures in place. The consequences if a member of your finance team decides to shred invoices, credit agreements and correspondence in an attempt to disguise their poor handling of a situation could be devastating."
Munns continues, "Organizations need to carefully consider whether their current systems and processes allow unscrupulous employees to easily commit fraud by doctoring or 'losing' documents, creating a false audit trail. Organizations without solid processes and systems in place need to act before it's too late."
Organizations need to carefully consider whether their current systems and processes allow unscrupulous employees to easily commit fraud
- Lynne Munns, Version One
In total, 86% of the survey's 70 respondents feel that electronic document management would help to prevent fraudulent activity involving business documents. These respondents believe that such a system would create a strong audit trail and reduce the opportunity to change data or create fictitious invoices. Greater control of documents, increased security access levels to restrict tampering and the inability to "lose" scanned documents are amongst the other reasons put forward by respondents.
Munns comments, "By using a secure electronic document management system which tightly integrates into organizations' accounting/ERP systems, documents cannot be shredded, 'lost' and altered, eliminating the risk of damage to an organization's reputation and ultimately, its bottom line. Ensuring the document management system is based on strict levels of authorization and is integrated into systems that maintain audit trails, also makes it an essential tool for preventing fraud."
