Finance News & Insights

The employee most likely to commit expense fraud is …

You’d like to think your employees would never dip into the company cookie jar, pad an expense report or hand in a fake receipt.

But the truth is, expense fraud happens everywhere. And it can cost companies hundreds, thousands or even millions of dollars in losses each year.

Finance remains the best line of defense to catch fraud and keep company money where it belongs. And new research from Chrome River pinpoints some typical fraudster characteristics and behaviors to help your team do just that.

The fraudster profile

Here’s a look at who’s most likely to commit fraud, and how:

  • Gender: male. Men were twice as likely to steal compared to women.
  • Age: under 44. A whopping 83% of fraud stemmed from this group.
  • Position: mid-level. Over half (58%) were manager-level or white-collar, non-managerial employees.
  • Method: paper process. Those using paper receipts and expense reports were twice as likely to commit fraud as those using automated solutions.

Applying the knowledge

Now you know what the average fraudster looks like. But whether it’s a 35-year-old male manager or a 63-year-old female VP, the question remains, “How can we stop it?”

Here’s some insight, based on other findings from Chrome River:

  • Adjust your auditing practices. Regular or random expense report audits help mitigate fraud. Make sure your A/P department knows these common fraudster attributes, so they can include a few random picks from this group within their sample when auditing expense reports.
  • Add harsher consequences. When caught stealing, 75% of employees said the biggest consequence they got was a warning. If other managers act like fraud isn’t a big deal, employees will adapt the same mentality. That’s why it’s vital to create a zero-tolerance culture from the top down. Revisit your policies, see if you need to establish stricter consequences and reiterate to managers that they must really enforce them.
  • Automate. As noted, employees were more likely to steal when their company had a paper-based process. The robust controls of an automated solution make it much harder to fudge and forge. As you work on your 2019 budget, you may want to consider fraud prevention technology as a viable investment. Another investment option: beefing up your card program. Credit and purchasing cards allow you to set more limits and controls that deter fraud.


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