Directors warned about impact of failure to prevent fraud offence

Under the wide-ranging Economic Crime and Corporate Transparency Act 2023, directors will be caught by the new offence of failure to prevent fraud

Under the new rules, where an employee has committed a fraudulent act for the benefit of their employer or an associated organisation the employer can be prosecuted. It will not come into effect until 1 September 2025 ‘to allow organisations to develop and implement their fraud prevention procedures’.

Additionally, the company will have to prove to the court if prosecuted that it had appropriate fraud prevention measures in place when the fraud was committed.

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