Page 552 - ACFE Fraud Reports 2009_2020

Perpetrators

Behavioral Red Flags Displayed by Perpetrators
We presented survey respondents with a list of 17 common behavioral red flags associated with occupational fraud and
asked them to tell us which, if any, of these warning signs had been displayed by the perpetrator before the fraud was
detected. In more than 91% of cases, at least one behavioral red flag was identified prior to detection, and in 57% of
cases two or more red flags were seen.

Figure 94 shows the frequency of behavioral red flags in our 2016 data. As that chart illustrates, the six most common
behavioral red flags were: (1) living beyond means; (2) financial difficulties; (3) unusually close association with a
vendor or customer; (4) a general “wheeler-dealer” attitude involving shrewd or unscrupulous behavior; (5) excessive
control issues or unwillingness to share duties; and (6) recent divorce or family problems. Approximately 79% of the
perpetrators in our study displayed at least one of these six red flags during their schemes.

What is even more notable is how consistent the distribution of red flags has been over time. The six most common red
flags shown in Figure 94 have also been the six most common red flags in every report since 2008, when we first began
tracking this data.

Figure 94: Behavioral Red Flags Displayed by Perpetrators

Living Beyond Means 45.8%
Financial Difficulties 30.0%
Unusually Close Association with Vendor/Customer 20.1%
Wheeler-Dealer Attitude 15.3%
Control Issues, Unwillingness to Share Duties 15.3%
Divorce/Family Problems 10.0% 13.4%
BEHA VIORAL RED FLA G Excessive Pressure from Within Organization 7.0% 9.0%
Irritability, Suspiciousness, or Defensiveness
12.3%
Addiction Problems
Complained About Inadequate Pay
No Behavioral Red Flags
8.8%
Refusal to Take Vacations
7.8%
Past Employment-Related Problems
6.8%
Social Isolation 5.9%
Past Legal Problems 5.6%
Other 5.5%
Excessive Family/Peer Pressure for Success 5.1%
Complained About Lack of Authority 4.4%
Instability in Life Circumstances 4.3%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

PERCENT OF CASES

68 REPORT TO THE NATIONS ON OCCUPATIONAL FRAUD AND ABUSE