Fraud warning: act now or fall foul of ECCT Act changes, says Azets 

Larger companies in Yorkshire could be at risk of failure to prevent fraud if they don’t meet new compliance requirements, a senior accounting professional has warned.

James Hamilton, a forensic accounting and valuation partner at UK top 10 accountancy and business advisory firm Azets in Yorkshire, commented after the Economic Crime and Corporate Transparency Act (ECCT) changed the scope of failure to prevent fraud for large businesses from this month. (SEPTEMBER)

As a result, a large business will be liable for prosecution if fraud is committed by someone acting on its behalf – even if senior leadership was not directly involved.

Employees, subsidiaries, agents and other ‘associated persons’ are all in the scope of the Act as those who could act on a business’s behalf.

James, who is based in Leeds and practices across the region, said: “Businesses who are found to be in breach of the new compliance requirements can face prosecution, reputational damage and significant financial penalties – even if senior management had no idea the fraud was happening.

“Larger companies here in Yorkshire need to act now to ensure they’re not at risk.”

James has specialised as a forensic accountancy practitioner since 1999, conducting investigations into fraud and accounting irregularities and assisting clients involved in a range of commercial and family disputes involving litigation, international arbitration, mediation and expert determination.
He recommends companies review and strengthen their internal fraud prevention measures to comply with the ECCT Act, including:

• Conducting fraud risk assessments to identify vulnerabilities
• Reviewing and updating internal controls, systems, and reporting lines
• Ensuring staff training and awareness around fraud risks and responsibilities
• Establishing clear procedures for reporting concerns or suspicions

He said: “Government agencies are expected to take a proactive approach to enforcing this and it is likely that the number of investigations will rise sharply now the legislation has taken effect.

“But by making these changes, firms can ensure their risk of falling foul of the new requirements is lowered, and that their fraud prevention is as strong as possible.”

Under the ECCT Act, a ‘large organisation’ is defined as one that meets at least two of the following criteria – employing more than 250 staff, turning over more than £36 million a year and with assets worth more than £18 million.

There are 8,250 large business in the UK out of 5.45 million businesses in total.

According to the figures from the Department for Business & Trade, in 2024 there were 600 business in Yorkshire and the Humber with more than 250 employees.

While smaller businesses fall outside the immediate scope, future expansion of the ECCT Act to medium-sized entities, of which there are 37,800 in the UK with 50 to 249 staff, has not been ruled out.

Azets’ Yorkshire offices are in Leeds, Bradford and York where it employs 335 people.