When it comes to fraud, no one’s above suspicion. But there are some commonalities among the folks most likely to steal from your company.
In fact, KPMG just looked at fraud instances all over the world to compile the profile of a “typical” fraudster.
And it’s a pretty detailed description.
While you don’t want finance staffers conducting any witch hunts — even if you have people on your payroll who fit this description to a T — you do want everyone to understand the signs and red flags that could mean there’s a potentially costly exposure.
Take a look, then share the following checklist of traits so your staffers know what (or whom) to keep an eye out for.
The typical fraudster is … :
- Aged 36 to 45
- Part of Senior management
- In Finance or a finance-related function
- Confrontational or aggressive when challenged
- Prone to making errors
- Tends to cut corners or bends rules
- Attempts to shift the blame for his errors
- Appears stressed out and under pressure
- Can be a bit of a bully
- Surrounds himself with “favorites,” specifically those who don’t challenge him
- Serves as the sole contact for certain vendors and suppliers
- Is overly worried about his own agenda
- Is surrounded by rumors of bad habits, addictions or vices.
Of course, sometimes it’s not the person but the circumstances that should raise a red flag. You also want your staffers well-versed on what should get them to do a little extra digging. Check out five warning signs KMPG recently identified:
- A particular business unit does well, even when its competitors are having a rough go of it (declining sales and/or profits).
- The corporate culture puts extreme pressure on managers to keep costs down and profits up with extremely high (almost impossible to achieve) goals.
- Highly complicated payment arrangements made only with certain suppliers.
- Excessive secrecy about the way a particular department, its operations and its financial results work.
- Profitability increases, but cash flow doesn’t improve along with it.
You might even try to incorporate some of these signs into your internal controls so you can be more confident you’d catch signs of trouble early … before they do major financial damage.