Who Commits Fraud

Introduction: WHO COMMITS FRAUD

Fraud is an intention or omission designed to deceive others resulting in the victims suffering a loss and/or the perpetrator achieving a gain. Fraud has a direct impact on all businesses and agencies and threatens their hard earned reputation.

Fraud perpetrators appear to be much like people who have traits that organizations look for in hiring employees, seeking out customers and clients, and selecting vendors. Most employees, customers, vendors, and business associates and partners fit the profile of fraud perpetrators and are probably capable of committing fraud and it is impossible to predict in advance which employees, vendors, clients, and customers will become dishonest.

In fact, when fraud does occur, the most common reaction by those around the fraud is denial. Victims can’t believe that individuals who look and behave much like them and who are usually well trusted can behave dishonestly.

WHY PEOPLE COMMIT FRAUD

Although there are thousands ways to perpetrate fraud, three key elements are common to all of them; (1) a perceived pressure, may involve a financial need, although non financial pressures (2) a perceived opportunity, and (3) some way to rationalize the fraud as acceptable, believing what’s been done is illegal and recognize as unethical and (2) believing to be able to pay back.

• Alternative Solutions:

• Incentive or pressure : Adequate compensation levels coupled with an attitude of commitment by management of organizations to create an incentive for employees translating to positive attitudes

• ATTITUDE: Employees are given tasks that match strength, logistics and knowledge so as not to attract continuous over-time with compensations that may lead to rationalizing fraudulent acts for these additional hours or efforts.

• OPPORTUNITY: Adequate qualified personnel for administrative and/or accounting and finance functions in all businesses, government and not-for-profit...