Fighting crime

The announcement by the British government of a new UK-wide Serious Organised Crime Agency (SOCA) is indicative not just of the reform being implemented in policing in the wake of the increase in the terrorist attacks on the big economies. It is just as significant in the more central role being given to accountants in the fight against crime, the growth in forensic accountancy and the opportunity for accountants to be involved in exciting developments.

SOCA will integrate the responsibilities which currently fall to the National Criminal Intelligence Service, the National Crime Squad, Home Office responsibilities for organised immigration crime, and the investigation and intelligence responsibilities of HM Customs and Excise in tackling serious drug trafficking and recovering related criminal assets. The agency will include forensic accountants, forensic software experts and staff with criminal intelligence and investigative skills. Governance arrangements for the new agency has not yet been determined.

In announcing the setting-up of SOCA, Home Secretary, David Blunkett, said:
'Modern organised criminals are sophisticated, organised and well-resourced entrepreneurs. We need to respond to this changing criminal threat, harness the skills of non-traditional investigators like accountants and legal experts and combine these with our world-class detectives and intelligence officers. We must become better organised, more sophisticated and more technologically capable than the criminals. We must not just keep pace but have to get ahead of them.'

John Smart, partner in global investigations and dispute advisory practice at Ernst & Young, said the increased reliance on forensic accountancy was a significant and growing trend. 'There are at least two factors working in favour of forensic accounting,' he said. 'The focus on corporate governance has raised awareness of criminal detection, whereas in the past it was a risk that people chose to ignore. The other factor is that there are signs that the police are taking financial crime more seriously and putting more money into fighting it. One example is the Assets Recovery Agency, which is using forensic accountants. And the police are doing more to get these skills internally.'

While demand for forensic accountants in the criminal law field is continuing to grow, there has been a decline in the volume of work for forensic accountants who specialise in providing expert witness in civil law suits. In the UK, the Woolf reforms of civil law led to more dispute resolution in the courts. In turn, forensic accountants have been brought in at an earlier stage in legal disagreements to provide informal advice to plaintiffs and defendants, but have tended to be used less as witnesses.

Financial services companies are becoming more willing to hire forensic accountants to investigate possible internal misbehaviour, added Smart. There has been a culture of covering up embarrassing dishonesty, but a new culture of shareholder activism and naming, shaming and fining by the Financial Services Authority has encouraged banks and other finance companies to deal openly with serious problems.

Surprisingly, interest from qualified accountants in moving into the forensic field is moving at a slower pace than the expansion of firms' activities. Smart explained: 'We find it difficult to fill the positions. There is a shortage of good, qualified people with three years or more experience.' Not only the Big Four, but also the second tier firms are recruiting heavily.

Recruiting problems were underlined by a report by the House of Commons' Northern Ireland Affairs Committee, 'The Illegal Drugs Trade and Drug Culture in Northern Ireland', which said that the work of the province's division of the Assets Recovery Agency - a key plank of the campaign against continued paramilitarism - was weakened by its shortage of forensic accountants.