Profile of Fraudster – Who cheats the Company – Top Managers of course – Private corruption?
Profile of a typical Fraudster
(1) He is a male aged between 36 and 55
(2) Works in the Finance Department for about six years
(3) Commits a crime alone with a desire for money and having opportunity
(4) Is a top Manager, repeated offender and the offence is over a period of time
(5) Corruption, Theft and Kickbacks are the most common frauds
(6) Fraud is possible because of Weak internal controls
(7) Detection most often is through anonymous tip off, rarely through internal controls.
(8) Companies are sensitive about image and so fraud cases never go to the Police or the Press
(9) Fraudsters rarely undergo criminal investigation
(10) Damage to the Company is severe and rarely there is a recovery
(11) Prevention is always a more efficient and cost effective
There are the revelations from the Profile of a Fraudster Survey, 2007 conducted by KPMG in Europe, the Middle East, India and Africa.
More than ten years ago, the profile had been drawn up by an expert as
++ Male
++ Intelligent
++ Egotistical
++ Inquisitive
++ Risk taker
++ Rule breaker
++ Hard worker
++ Under stress
++ Greedy
++ Financial need
++ Disgruntled or a complainer
++ Big spender
++ Overwhelming desire for personal gain
++ Pressured to perform
++ Close relationship with vendors/suppliers
Another expert in 1997 profiled the fraudster as
++ They are male. 3/4th of all frauds are committed by men.
++ They are intelligent. Many times, they commit fraud for the challenge because they are bored with their job.
++ They are very egotistical. They feel they are worth more than they may be, pertaining to their job classification.
++ They are risk takers. They are not afraid to fail.
++ They are rule breakers, like to take shortcuts, and they justify the breaking of the rules.
++ They are hard workers, usually arriving early for work, leaving later at night and never taking vacations.
++ This makes them seem like an unlikely candidate to management, since they are putting in more time. But, this is the time in which many of their fraudulent activities are occurring.
++ Many are married. Married employees commit the greatest number of frauds and cause the highest median losses.
++ Many are members of management. Management are sixteen times more likely to commit fraud than non-managerial employees.
++ Median loss is higher for males than females: $185,000 for males, $48,000 for females.
++ People that commit fraud think the same way. One fraud leads to another, and a pattern is begun.
So the KPMG survey does not really reveal anything new. Nothing has changed over the last decade.