Many employers often ask the question why employees commit fraud and what the danger signs is one can make use of in identifying any such risks. There are no laid down rules which can be used in identifying possible risks, but from investigations conducted over a long period of time, where employees’ defrauded employers, the following might be considered as guidelines for identifying employees that may pose a risk towards an organization:

Living beyond their means

The majority of employees resorting to defrauding their employers stated that the fact that they lived beyond their means lead to them committed fraud. As times became more difficult they were unable to maintain the repayments of their debt and subsequently their debt levels outdone their income levels.

An overwhelming desire for personal gain

Being ambitious is a fantastic characteristic for any person, but developing an overwhelming desire for personal gain may be a danger sign. The majority of fraudsters who developed this ambition stated that the desire for monetary reward increases by the day and money never becomes enough, which subsequently leads to them committing fraud.

High personal debt

Debt is the single most important factor why employees become involved in fraud. Not wanting to place their employment in jeopardy due to debt, they start committing acts of fraud in obtaining additional income to service their levels of debt.

Working directly with customers

Often, the majority of employees involved in acts of fraud, has been in a position within the company where they dealt directly with customers. Often, one or more of the other signs, mentioned in this article may be involved as well.

Too much financial responsibility and too little supervision

Often, the employee more likely to defraud an institution is the person who has too much financial responsibilities and too little supervision. These employees often realize the abundance of opportunities in which fraud can be committed and when required will often make use of these opportunities.

Feeling pay was not commensurate with responsibility

Where the employee finds himself in a position where he feels that the salary does not warrant his responsibilities he is more likely to become involved in acts of fraud in order to earn an additional form of income.

A ‘wheeler-dealer’ attitude

Often, where an employee suddenly displays signs of a wheeler-dealer attitude, where he continuously has goods or services on offer to fellow employees or even customers, outside his normal duties, this employee displays signs that he might resort to fraudulent activities in order to ensure additional income.

Strong challenge to beat the system

Where an employee continuously indicate signs that he or she wants to confront and beat the system it is likely that this person would involve himself with fraudulent activities, which are prohibited by the employer.

Excessive gambling habits

Again, often a sign of financial difficulties, employees showing signs of excessive and continuous gambling habits are likely to involve him with acts of fraud where successes in gambling are minimized.

No recognition for job performance

Many employees may feel, at times that there is no recognition, on behalf of the employer, for performance. These employees are likely to involve themselves in acts of fraud when such opportunities present themselves.