(from a study conducted by ACFE – Association of Certified Fraud Examiners)

Gender
Typically males are more than twice as likely to commit fraud as their female colleagues. These losses due to fraud by men are more than twice as great as frauds perpetrated by women. One hypothesis: with males holding more management and executive level positions- males have a greater opportunity to commit costly fraud.

Do you think that this fact would change if woman held higher level positions – is the fact that higher amounts of loss due to fraudulent activity is because of gender or opportunity?

Age
The average fraudsters are over the age of 40. Generally speaking, older professionals often occupy positions with authority and have more access to company resources. In fact, fraudsters in their 50’s and beyond averaged a median loss of $500,000 – this is twice as many as any age bracket below them.

I once again wonder if the fraudsters documented age is due to opportunity. Would these same activities occur if the average age of a CEO is 30?

Team work?
Most fraud schemes the perpetrator acts alone.
If the scheme involved a collusion of two or more parties, the fraud was much more costly, to the tune of 4x higher compared to when a perpetrator acts alone.

Perhaps the collusion enables employees to better circumvent controls that might stop a single perpetrator?

Education and Position
Generally the higher the education level, the more costly the fraud. Most of the fraudsters work in the accounting department when they execute their scheme and have the access to assets and the ability to conceal the fraud.

Executives and upper management come in second.

Behavior Flags
The most common flags are
• living beyond one’s means,
• struggle with financial difficulties
• “wheeler-dealer attitude,”
• control issues (unwillingness to share duties), or
• personal problems, such as a divorce
Other red flags might include irritability or defensiveness, addiction problems, past legal problems, refusal to take vacation and complaining about inadequate pay.

The presence of these characteristics does not in and of itself signify that a fraud is occurring or will occur in the future. That is where I come in, as an anti-fraud professional I am trained to understand and identify the potential warning signs of fraudulent conduct. My designation as a Certified Fraud Examiner provides me with the expertise needed to detect, prevent, and combat fraud at every level.

You can learn more about CFEs at www.ACFE.com.

Stay Safe,

Sherry McCourt, CFE
www.sherrymccourt.com

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