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1 J. Fin. Crime 11 (1993-1994)

handle is hein.journals/jfc1 and id is 1 raw text is: The Function of Information Systems in Identifying Fraud in Retail Businesses John Burrows John Burrows is a principal of crime management consultants Morgan Harris Burrows. He was formerly a principal research officer in the Home Office and has conducted research on many aspects of business crime, crime prevention and policing. Between 1986 and 1991 he was the Security Adviser to the Dixons Group of companies, where this paper was originally prepared. He is Visiting Fellow at the Centre for Risk Management, Cranfield Institute of Technology and a member of the CBI/Crime Concern Working Group on Business Crime. ABSTRACT The aim of this paper is to emphasise the pivotal role that information systems, of various kinds, play in both identifying fraud committed against the medium to larger retail concern and in investigating who has been responsible. Reliable statistics on retail fraud are difficult to come by, but the paper summarises some of the information available from Government, police and retail sources and the arguments for exercising rigorous control. It then goes on to examine some of the prerequisites if information systems are to combat fraud effectively. Attention is focused on the sales audit, stock audit and security functions, and examples of applications in each of these fields are provided. INTRODUCTION Three observations can be made about fraud - and particularly fraud in the retail context. 1 The value of recorded frauds more than outweighs all other property crimes. Fraud is the only offence in the Home Office 'Criminal Statistics' vhich does not incorporate statistics on value (a convention that has attracted criticism).' Nonetheless this assertion can be supported. In 1988, for example, the cases dealt with by the Metropolitan and City Police Fraud Squad alone totalled 44.2bn at risk, whereas the total loss for all theft, robbery and burglary in the whole of England and Wales was less than half that sum.2 2 Retailers are amongst the biggest losers. Here again Home Office figures have their limitations: they do not separate losses by type of loser. Corporate victims clearly account for the lion's share of cases dealt with by police fraud squads3 and the accolade (or wooden spoon) must certainly go to the Treasury which, on their own 'guesstimate', lose revenue from tax of about 7 to 7.5 per cent of GDP an- nually.' But a 1988 survey by the Home Office Working Group on the Costs of Crime' indicated that banks 11 © Emerald Backfiles 2007

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