In over 80 percent of reported fraud cases in 2010 and 2011, the perpetrator displayed one or more of the behavioral red flags associated with fraudulent conduct, according to the “2012 Report to the Nations on Occupational Fraud and Abuse” from the Association of Certified Fraud Examiners (ACFE). The top red flags of behavior present during a fraud scheme, listed from more common to less common, are: - Living beyond the person’s means - Financial difficulties - Unusually close association with vendor/customer - Control issues, unwillingness to share duties - Divorce/family problems - “Wheeler-dealer” attitude - Irritability, suspiciousness, or defensiveness - Addiction problems - Past employment problems - Complaints about inadequate pay - Refusal to take vacations Would a higher rate of pay for
To prevent fraud, should accounting professionals command a higher rate of pay?
Answers
Hmmm, that all seems like personal trouble that an extra $5K wouldn't solve. Those are longer term issues, and more money could even lead to more trouble (by further extending oneself beyond one's means). Many of those can be dealt with at least a bit by doing a background and credit check on prospective employees. We do that with all accounting, finance and
This is an interesting list, though. Thanks for posting.
Background and credit check could be implemented. I would turn to a stronger set of checks and balances in place in those key roles. Inspect what you expect.
If fraud is being committed by a few outliers, I can not understand increasing all pay. It would never pay-off. Solution - quality hires, envoronment of ethics, and as Christie points out Controls. Please check out this blog post if interested - "The Best Way to Avoid Fraud is to Remove the Opportunity" (http://cfotips.com/?p=559).
Should we command higher pay - Yes
Will it stop fraud? -- Well I have a bridge for sale that spans the Hudson River :)
Before we jump to a lot of conclusions here, by fraud, do you mean theft or cooking the books? Furthermore, it seems that you're implying that it's the accounting folks who are engaging in fraud. Much of what you're describing goes on elsewhere in the organization. For example, managers in
Hmmmmmm......................
I work in the public sector and, many of the activities you mention are rampant and there is no way to stop them as, you'll likely lose your job and none of the fraudulent activity will change.
It's not a conspiracy by the way. It's a symbiotic relationship between elected officials bent on milking perqs and votes; entity general managers with egos as big as they get; the fourth estate not doing its job; large groups of public employees protecting their positions in an effort to reach that golden ring called retirement - even when it is ten or fifteen years away; and finally, a generally cynical and disinterested public.
Now that I re-read my run on sentence above, I would recommend forcing public agencies to pay less by freezing their ridiculous defined benefit pension and health care in retirement plans and moving them to defined contribution plans like the rest of the world has. That might make employees less inclined to participate in the see, hear and speak no evil group-think activity and speak up once in a while thus leading to less proclivity by the powers that be to engage in fraudulent activity.
One can only hope...............or return to the private sector. ;-(