How ideal would it be if employees prone to fraud had the letter “F” tattooed on their forehead? You could keep a close eye on them and prevent them from ever gaining access to the accounting books. Unfortunately, potential thieves are never that obvious.
It starts with pressure
All too commonly, deceitful employees are the most likable people in the office. They get along with everyone, are helpful, and are excellent at their jobs. They even seem trustworthy. But fraud doesn’t begin with dishonesty; it begins with pressure. The demands may be at work (corporate insists on satisfying lofty revenue goals) or personal (settle gambling debts or covering up a problem with substance abuse).
Sadly, many skills necessary to thrive in the business world overlap with skills used to commit fraud. Salesmanship, sociability, determination, persistence, competitiveness and an appetite for acquiring material possessions all are characteristics of successful professionals — and successful criminals.
The usual suspects
Those involved in occupational fraud typically possess common traits. Examples include:
Entitled executives. Upper-level fraud perpetrators tend to be incredibly ambitious and to have an overdeveloped sense of superiority. These types tend to become extremely upset by criticism or scrutiny and enjoy being encircled by their “groupies.” These individuals might embellish financial statements to embezzle funds or to make the company’s or their own performance look better.
Resentful workers. Rank-and-file employees who commit fraud are more likely to feel they’re undervalued, underpaid or treated unfairly. They justify their thefts accordingly. Some steal to seek retribution.
Con artists. Luckily this class of criminal — capable of lying to people’s faces and leaving them penniless without remorse — isn’t found too often in the workplace. However, con artists can be destructive, and they usually blame their victims.
Not all people who have these attributes will steal —some will turn to fraud, but others will withstand the temptation. Here is where strong internal controls pay off. In companies with comprehensive internal controls, the risks of getting caught are too high for most employees to attempt, even if they are feeling financial pressure. In environments that seem laxer, more people will try it.
Putting ethics first
Weeding out dishonest employees is no easy task. Cultivate an ethical business culture while reinforcing internal controls. Encourage and reward honesty; discipline any wrongdoing. For help creating an ethical environment, feel free to reach out to us at 972-931-6803 or click here to contact us.