5 Myths About Fraud
From my Wisconsin Law Journal article 5 Myths About Fraud:
The following are five of the fraud myths that I regularly run into in my fraud investigation practice. Whether owners and executives actually utter these out loud or not, merely buying into these myths mentally can be a recipe for disaster.
2. Most people are honest and won’t commit fraud. This is a dangerous approach to take to the business of fraud. It is true that most people are generally honest. But to rely on this instead of putting controls in place to prevent fraud is a big mistake.
While it’s wise to hire those with a track record of honesty, past behavior doesn’t necessarily predict future behavior. Almost 88 percent of employees and executives who commit fraud against their employer have never before been charged or convicted of a fraud-related offense. This means it’s nearly impossible for companies to predict who is going to commit fraud and when they are going to do it.
It is a fact that honest people can and do commit fraud. Outside pressures can cause people to behave in ways they normally would not. Things that could push someone toward fraud include addictions, divorce, overwhelming debt, and gambling problems. When pressures like this are present, it’s difficult to predict who will commit fraud.
In the end, those who commit fraud come from all walks and ways of life. From clerks to executives, no one is immune. Thieves come from all social classes and all economic backgrounds. If given a strong motivation and ample opportunity, anyone can commit fraud against her or his employer.
