IT bods fear Enron-style scandal

IT bods fear Enron-style scandal

Most UK IT professionals admit co-workers have the capability to tamper with or lose documents to suit their own ends

More than three-quarters of senior IT professionals believe a case of fraudulent practice comparable to the Enron scandal could happen in the UK, research has claimed.

The research, commissioned by document management software company Version One, revealed that 77 per cent of the 70 respondents think an Enron-esque scandal could take place in the UK. 89 per cent claimed that someone at their company had the capability to tamper with or lose documents to suit their own ends.

30 per cent indicated they had witnessed activity concerning business documents which could be considered fraudulent, with two thirds of these saying they had seen this more than once. Only six per cent of respondents thought that the UK's current financial regulations could prevent misreporting on a level equivalent to the Enron case.

Lynne Munns, general manager of Version One, said: "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.

"Organisations 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. Organisations without solid processes and systems in place need to act before it’s too late.”

American energy behemoth Enron filed for bankruptcy in 2001 after it was revealed it had worked with accountancy firm Arthur Andersen to engage in fraudulent accountancy practices.