The statistical profile of a fraudster


By Andi McNeal, CFE, CPA

ACFE News

Accounting doesn’t happen in a vacuum. The performance, processing, reporting and analyzing of financial transactions inherently involves people. And people, by nature, make errors, have lapses in judgment, and — sometimes — break the rules intentionally.

Although this point may seem self-evident, it’s a message that all too often gets forgotten amidst the check-the-box approaches and “it couldn’t happen here” mindsets that are common in many organizations.

Thinking about the people behind the processes, transactions and numbers — and considering what might lead those people to succumb to the pressure, opportunity and rationalization to commit fraud — is critical to protecting an entity’s resources from dishonest employees.

As anti-fraud professionals know, individuals who perpetrate fraud look just like everyone else. They are our coworkers, our acquaintances and even our friends and family members. Many appear outwardly honest and ethical, which makes it particularly difficult for us to suspect or believe that they would breach their employers’ trust. And yet, effectively preventing and detecting fraud requires us to do just that.

The ACFE’s 2014 Report to the Nations on Occupational Fraud and Abuse provides some insight into the people behind the crimes. Of the perpetrators responsible for the 1,483 occupational fraud cases analyzed in our study:

  • 42 percent were staff-level employees, and 36 percent were mid-level managers.
  • 55 percent worked alone in committing their scheme.
  • 52 percent were between the ages of 31 and 45.
  • Two-thirds were male.
  • 47 percent had worked for the victim organization for less than six years.
  • 72 percent had at least some university education.
  • 45 percent worked in the accounting, primary operations, or sales functions of the victim organization.
  • 87 percent were first-time offenders with no criminal history of fraudulent behavior.
  • 44 percent were known to be living beyond their means.

Obviously, simply meeting the profile outlined by the data above doesn’t mean that an individual is going to commit fraud, nor should someone who falls outside the profile be immune from suspicion. However, examining trends in the characteristics of fraudsters can provide context and perspective to those charged with identifying high-risk areas and individuals.

With this in mind, the ACFE has created an infographic that illustrates the statistical profile of a fraudster to help inform anti-fraud professionals, management and the general public about some of our findings regarding occupational fraud perpetrators. This profile can be a valuable training and awareness tool, particularly when conveying the message that fraudsters don’t exhibit any sort of identifying hallmark — no special uniforms or badges, no “bad-guy” masks. The more we understand and help educate others about the human face of fraud, the better prepared we all are to prevent and detect fraudulent behavior.

Read more about the 2014 Report to the Nations at ACFE.com/RTTN.

Andi McNeal, CFE, CPA, is the ACFE's director of research. 




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