Is There a Fraudster in Your Organization? 16 Red Flags to Watch

An embezzler or other workplace fraud perpetrator will often display certain telltale red flags. One of the many charts included in the "2008 Report to the Nation on Occupational Fraud & Abuse," published by the Association of Certified Fraud Examiners, includes the following listing of these behavioral indicators:

1. Living beyond means (370 cases; 38.6% of 959 total cases in the study)
2. Financial difficulties (327; 34.1%)
3. Wheeler-dealer attitude (195; 20.3%)
4. Control issues, unwillingness to share duties (179; 18.7%)
5. Divorce/family problems (164; 17.1%)
6. Unusually close association with vendor/customer (146; 15.2%)
7. Irritability, suspiciousness, or defensiveness (130; 13.6%)
8. Addiction problems (128; 13.3%)
9. Past legal problems (83 cases; 8.7%)
10. Past employment-related problems (76; 7.9%)
11. Complaining about inadequate pay (70; 7.3%)
12. Refusal to take vacations (65; 6.8%)
13. Excessive pressure from within the organization (62; 6.5%)
14. Instability in life circumstances (47; 4.9%)
15. Excessive family/peer pressure for success (40; 4.2%)
16. Complaining about lack of authority (35; 3.6%)

Download the complete 2008 Report to the Nation on Occupational Fraud & Abuse

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.