Monday, September 23, 2013

Nancy Young: 18 Red Flags of Fraud

Speaking at the AICPA Not-for-Profit Industry Conference earlier this year, Nancy Young, who is part of the Business Assurance Services Group of Moss Adams, outlined the behavioral red flags of fraud perpetrators' lifestyles, as listed by the Association of Certified Fraud Examiners (ACFE).  The Nonprofit Times today reproduced the list:

  • Living beyond their means: 43.0 percent
  • Financial difficulties: 36.4 percent
  • Control issues: 22.6 percent
  • Unusually close with vendors/customers: 22.1 percent
  • Wheeler-dealer attitude: 19.2 percent
  • Divorce or family problems: 17.6 percent
  • Irritability, suspiciousness/defensiveness: 14.1 percent
  • Addiction problems: 11.9 percent
  • Refusal to take vacations: 10.2 percent

According to the Times, Young also said that white-collar criminals share certain characteristics, some of which I find pretty interesting:

  • Likely to be married.
  • Member of a church.
  • Educated beyond high school.
  • No arrest record.
  • Age range from teens to older than 60 (although 31-50 is the largest group).
  • Socially conforming.
  • Employment tenure from one to 20 years.
  • Acts alone 70 percent of the time.
  • Males tend to steal larger amounts than females.

This leads me to wonder: in dealing with nonprofits, whom can we trust?


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With regard to the shared characteristics, I think that all that they demonstrate is that white-collar criminals are first white-collar workers.

Posted by: Percy Gryce | Sep 23, 2013 6:16:14 PM

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