Speaking to Accountants Daily, HLB Mann Judd partner Simon James said that wage fraud doesn’t necessarily lend itself to any one particular industry or business type, and that the accounting industry is no exception.
“I think wage fraud is very prevalent across all industries. Staff try to get away with as much as possible,” Mr James said.
“Wherever there are rules are in place people look at bending the rules to their own advantage. You do see it in many guises.”
Mr James said that not logging leave and working unnecessary overtime are two of the more common methods of wage fraud.
“The most obvious things that we see isn't necessarily stealing wages, it's effectively stealing holidays. So holiday forms are not put in or not submitted properly so people are taking leave and that leave isn't being recorded and they don't own up to the fact,” he said.
“Other things are you see lots of people colluding on shift work to get overtime so that the staffing is not right in the normal hours so you end up with a lot of overtime. We see that a lot where groups of people group together to make sure there's enough overtime that's being shared around.”
Accountants are ideally placed to assist their clients to identify and mitigate wage fraud within their companies according to Mr James.
“Obviously from an audit point of view you look at the controls over the payroll systems and any weaknesses in controls should obviously be pointed out. Tell clients to print reports out about annual leave and to just cast an eye down and make sure that everything has been recorded,” he said.
“The other thing about wages as well is it's kind of a set and forget. Most people review wages just to make sure that the total dollar figure is in line with expectations, but I think you do need that proper check to go back and look at what rates people are being paid at, is the salary entered properly.”
Mr James said that the use of technology should assist in reducing wage fraud, but that even payroll technology should be checked.
“I think technology is obviously going to tighten the processes up, so rostering systems are a lot more robust than they used to be in terms of making sure you minimise your wage costs and people are not smashing overtime that don't need to,” he said.
“A lot of trust is put in the IT systems now but occasionally there's a bug in there so it is definitely worth going through and actually doing some proper manual checks across it.”