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18 red flags of fraud

By The NonProfit Times - September 23, 2013

It used to be that employees who didn’t take vacations were seen as hard-working go-getters, people who devoted themselves to the company.

That’s what used to be, but in fact refusal to take vacation is one of the red flags that could indicate an employee is engaging in fraud.

Speaking at the AICPA Not-for-Profit Industry Conference, Nancy Young, who is part of the Business Assurance Services Group of Moss Adams, outlined the behavioral red flags of fraud perpetrators’ lifestyle, as listed by the Association of Certified Fraud Examiners (ACFE). They are the following:

  • Living beyond their means: 43.0 percent
  • Financial difficulties: 36.4 percent
  • Control issues: 22.6 percent
  • Unusually close with vendors/customers: 22.1 percent
  • Wheeler-dealer attitude: 19.2 percent
  • Divorce or family problems: 17.6 percent
  • Irritability, suspiciousness/defensiveness: 14.1 percent
  • Addiction problems: 11.9 percent
  • Refusal to take vacations: 10.2 percent

Young also said that white-collar criminals share certain characteristics, some of which might be surprising:

  • Likely to be married.
  • Member of a church.
  • Educated beyond high school.
  • No arrest record.
  • Age range from teens to older than 60 (although 31-50 is the largest group).
  • Socially conforming.
  • Employment tenure from one to 20 years.
  • Acts alone 70 percent of the time.
  • Males tend to steal larger amounts than females.


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