KPMG Analysis Identifies Key Fraudster Traits

A senior employee known as an aggressive workaholic, but who seems stressed, yet rarely takes vacations, declines promotions, and zealously protects his business unit from outside scrutiny while personally handling choice vendors may be up to something devious, according to an analysis of corporate fraud cases investigated by KPMG International's member firms. Knowing the common traits of a fraudster can help physician practice employers be better prepared to prevent damaging incidents from happening in their organizations. The report, "Who is the typical fraudster?," found that 56 percent of the frauds the KPMG member firms investigated had exhibited one or more red flags that should have brought management attention to the issue, but only 10 percent of those cases had been acted upon prior to requiring a full investigation.

The KPMG analysis found that a fraudster's traits include:

•  Volatility and being melodramatic, arrogant and confrontational, threatening or aggressive, when challenged.

•  Performance or skills of new employees in their unit do not reflect past experiences detailed on resumes.

•  Unreliability and prone to mistakes and poor performance, with a tendency to cut corners and/or bend the rules, but makes attempts to shift blame and responsibility for errors.

•  Unhappy, apparently stressed and under pressure, while bullying and intimidating colleagues.

•  Being surrounded by "favorites," or people who do not challenge the fraudster, and micromanaging some employees, while keeping others at arm's length.

•  Vendors/suppliers will only deal with this individual, who also may accept generous gestures that are excessive or contrary to corporate rules.

•  Persistent rumors or indications of personal bad habits, addictions or vices, possibly with a lifestyle that seems excessive for their income, or apparently personally over-extended in their finances.

•  Self-interested and concerned with their own agenda, and who has opportunities to manipulate personal pay and rewards.

http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Pages/typical-fraudster.aspx

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.