Profile of a Fraudster

Just finished having a skim of the KPMG Profile of a Fraudster Survey for this year, which I found from the recent Risks Digest post. I have to admit that this survey interested me not only in the professional sense but also personally given my family history. Some of the more interesting statistics do not surpise me at all:

• 70 percent of fraudsters were between the ages of 36 and 55 years old.
• 85 percent of perpetrators were male.
• In 68 percent of profiles the perpetrator acted independently.
• Members of senior management (including board members) represent 60 percent of all fraudsters. An additional 26 percent of profiles involve management level persons bringing the total to 86 percent of profiles involving management. This result highlights a risk that every company faces: executives are entrusted with sensitive company information and yet are also often in a position to override internal controls.
• 91 percent of perpetrators did not stop at one single fraudulent transaction but rather performed multiple fraudulent transactions; every third perpetrator acted more than 50 times.
• Greed and opportunity (when taken together account for 73 percent of profiles) are indicated to be the overriding motivations for fraud.
• No prior suspicion existed in more than half of the profiles…
• Perpetrators were able to commit fraud by primarily exploiting weak internal controls, in 49 percent of profiles.

I guess the only additional information I would have liked to have seen from this report is more international information, such as from Australia and the US.

Posted by Christian 25 April 2007

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