UK firms urged to strengthen expense controls amid fraud risks

By Divya Shah

The UK government’s renewed focus on combating fraud is placing greater scrutiny on corporate financial controls, with experts warning that employee expenses remain one of the most overlooked areas of financial risk. 

The warning follows the publication of the Ministry of Justice’s Counter Fraud Strategy 2026–2030, released shortly after the first anniversary of the UK’s failure-to-prevent fraud offence, which came into force in September 2025.  

The strategy arrives as regulators and businesses increase efforts to strengthen fraud prevention frameworks and improve corporate accountability. 

The sentencing of three former company directors for their roles in a £70 million pension investment fraud has highlighted the financial and reputational damage that can result from inadequate controls.  

At the same time, workplace fraud is becoming more sophisticated, with the growing use of artificial intelligence adding new challenges for finance teams. 

According to a 2025 survey by fraud prevention service Cifas, nearly a quarter of employees surveyed said expense fraud could be justified, making it the most common form of workplace fraud reported.  

The research also found increasing use of AI tools to create fake receipts and support fraudulent expense claims. 

While organisations continue to focus heavily on procurement, payments and large-scale financial crime, industry experts argue that employee expenses often receive far less attention despite representing a control risk.  

Thousands of expense claims pass through organisations every year, yet many continue to rely on manual reviews conducted days or even weeks after spending has occurred. 

AccountsIQ Group, comprising accounting software provider AccountsIQ and expense management platform ExpenseIn, said many businesses still lack sufficient controls to detect inappropriate or fraudulent spending before it enters their financial systems.  

Disconnected processes for spending, approvals and accounting often limit visibility and make it more difficult to identify irregularities. 

Darren Cran, CEO of AccountsIQ, said many organisations continue to prioritise larger transactions while overlooking routine employee spending. 

“Organisations tend to focus on larger payments and sophisticated fraud, while hundreds of thousands of everyday employee expense transactions receive less scrutiny. Therefore, expenses need to be an important part of a financial control environment,” Cran said. 

He added that relying solely on company expense policies is no longer sufficient, particularly when claims are reviewed retrospectively through manual processes that can delay the identification of problems. 

Experts noted the importance of integrating expense management with broader financial reporting processes. Combining expense data with accounting systems can help organisations improve transparency, monitor compliance and create a clearer record of spending activity across the business 

Richard Jones, VP of Product at ExpenseIn, said businesses should treat expense management as a core component of financial controls rather than an administrative function. He noted that modern digital expense platforms can embed compliance checks directly into the spending process through automated policy validation, digital receipt capture and workflow approvals. 

According to Jones, connected expense management systems can provide finance teams with greater visibility into spending patterns while helping organisations establish stronger governance and audit trails.